JOBY Aviation (NYSE:JOBY) is a flying car stock operates in the emerging air mobility sector. Despite recent gains, its potential in the early-stage market is noteworthy.
With strong financial backing and expertise in electric vertical takeoff and landing aircraft, long-term growth investors may certainly consider a cautious investment in this flying car stock.
The company is a leader in the innovative eVTOL space. We can view these electric vertical takeoff and landing aircraft like air taxis. For short trips in and around urban centers, it’s the flying car meets helicopter that makes a heck of a lot of sense for those with the desire to get somewhere quick, and pay up for the experience.
Despite recent stock struggles, JOBY stock has surged over 105% year-to-date. Shares remain above $7 per share at the time of writing, as investors price in future growth potential.
The company’s promising prototype unveiled for customer flights has led to continued interest around the stock. Let’s dive deeper into why this stock may be a worthwhile pick in this current environment.
Betting Big on This Flying Car Stock
When big money investors bet big on a stock like Joby Aviation, it’s worth taking note. Data from Whale Wisdom reflects optimistic institutional sentiment for Joby Aviation.
These data suggest that more funds are buying JOBY stock, with 13F holdings increasing by almost 30%, and new positions surged by 94%. Increased positions rose while closed and reduced positions declined. Joby’s falling put/call ratio indicates reduced bearish sentiment.
There are some pretty notable names topping up their Joby holdings. Investors such as Paul Cahill Sciarra, JoeBen Bevirt, Bailie Gifford & Co., Toyota Motor Corporation, and Capricorn Investment Group each have positions in JOBY stock.
Joby finished Q1 2023 with $978 million in cash and received $180 million in May, providing strong financial flexibility for commercialization. Big money investors clearly like how this stock is positioned relative to its peers right now.
JOBY Has Strong Government Ties
The FAA’s projection indicates air taxis might not appear over U.S. cities until 2028. Yet, this doesn’t hinder Joby’s near-term objectives. Joby Aviation focuses on electric vertical takeoff and landing planes with government backing.
These aircraft can take off vertically and fly like planes, designed for commercial passenger flights.
Joby Aviation holds a U.S. Air Force contract worth about $131 million. They will place an eVTOL aircraft at Edwards Air Force Base in 2024. The FAA also granted them a Special Airworthiness Certificate for their first aircraft built in California.
What Now
I think investors would be well-served considering a cautious speculative investment in Joby Aviation right now. While this is a position I’m considering putting on, it’s one I would probably keep small.
That’s because, despite government support for the company and its progress toward commercial service, there’s also plenty of risk with the company’s business model.
If everything goes according to plan, the company will begin commercial service by 2025, meaning investors will have to wait some time before receiving their capital back as profits.
Considering the risks and growth potential of Joby Aviation, investors should be patient because of the aircraft’s commercialization timeline and recent stock rally.
Yet, those open to risk might find it worthwhile to invest in JOBY stock, as there’s potential for substantial growth in the long run.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
