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Joby Aviation (JOBY - Free Report) is bolstered by its robust liquidity. The company’s commitment to sustainability is encouraging. However, high operating expenses do not bode well.
Factors That Augur Well for JOBY
The partnership between Joby Aviation and Jetex aims to bring sustainable air mobility to the Middle East. JOBY will install its electric air taxi charging system at Jetex locations, creating a network connecting key hubs like Dubai and Abu Dhabi. This collaboration focuses on eco-friendly, high-speed travel with zero emissions and reduced noise. With agreements to operate in both cities, the partnership could serve as a model for global electric air taxi services.
Joby Aviation’s December quarter results highlight major achievements, including record progress toward FAA (Federal Aviation Administration) certification and the delivery of a second aircraft to the U.S. Air Force. The company raised more than $1 billion in funding and is on track to begin passenger operations by late 2025 or early 2026. Joby Aviation also made strides with a hydrogen-electric aircraft and successful demonstrations in Korea.
Joby Aviation plans to build facilities in Dayton capable of producing up to 500 eVTOL and giving its full form in the first-use aircraft annually, highlighting its commitment to scaling production and commercializing electric air taxis. As urban congestion grows, the demand for efficient, eco-friendly transport rises. eVTOLs, which are quieter and emission-free compared with helicopters, also excel in accessing remote areas, making them ideal for search and rescue missions. The eVTOL market is expected to grow from $1.76 billion in 2024 to $24.1 billion by 2031, witnessing a CAGR of 51.6%.
Moreover, robust liquidity bodes well for the company. In the fourth quarter of 2024, JOBY reported a current ratio (a measure of liquidity) of 20.14. A current ratio of greater than one is always recommendable as it indicates that the company has sufficient cash to meet its short-term obligations.
Owing to such tailwinds, shares of JOBY have rallied 27% over the past year compared with the Zacks Transportation – Airline industry’s 16.3% growth.
Image Source: Zacks Investment Research
JOBY: Key Risks to Watch
Joby Aviation is facing rising operating expenses, a challenge compounded by its history of high costs. Increased research and development spending, along with higher selling, general and administrative expenses, are driving up operating costs. In 2023, operating expenses rose 20.6% year over year. In 2024, the metric increased 26.2% year over year.
Joby Aviation’s financial stability and ability to fund its operations and growth largely depend on receiving continued investments. While these investments are beneficial for the company, they also highlight its reliance on external sources of funding to cover its costs and support its expansion efforts, rather than being fully self-sustaining financially.
American Airlines currently carries a Zacks Rank #2 (Buy)
AAL has an expected earnings growth rate of 23.5% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 37.1%. Shares of AAL have risen 25.6% over the past six months.
UAL has an expected earnings growth rate of 22.2% for the current year.
The company has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average surpriseis 22.9%. Shares of UAL have risen 87.2% in the past six months.
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Here's Why Investors Should Retain JOBY Stock Now
Joby Aviation (JOBY - Free Report) is bolstered by its robust liquidity. The company’s commitment to sustainability is encouraging. However, high operating expenses do not bode well.
Factors That Augur Well for JOBY
The partnership between Joby Aviation and Jetex aims to bring sustainable air mobility to the Middle East. JOBY will install its electric air taxi charging system at Jetex locations, creating a network connecting key hubs like Dubai and Abu Dhabi. This collaboration focuses on eco-friendly, high-speed travel with zero emissions and reduced noise. With agreements to operate in both cities, the partnership could serve as a model for global electric air taxi services.
Joby Aviation’s December quarter results highlight major achievements, including record progress toward FAA (Federal Aviation Administration) certification and the delivery of a second aircraft to the U.S. Air Force. The company raised more than $1 billion in funding and is on track to begin passenger operations by late 2025 or early 2026. Joby Aviation also made strides with a hydrogen-electric aircraft and successful demonstrations in Korea.
Joby Aviation plans to build facilities in Dayton capable of producing up to 500 eVTOL and giving its full form in the first-use aircraft annually, highlighting its commitment to scaling production and commercializing electric air taxis. As urban congestion grows, the demand for efficient, eco-friendly transport rises. eVTOLs, which are quieter and emission-free compared with helicopters, also excel in accessing remote areas, making them ideal for search and rescue missions. The eVTOL market is expected to grow from $1.76 billion in 2024 to $24.1 billion by 2031, witnessing a CAGR of 51.6%.
Moreover, robust liquidity bodes well for the company. In the fourth quarter of 2024, JOBY reported a current ratio (a measure of liquidity) of 20.14. A current ratio of greater than one is always recommendable as it indicates that the company has sufficient cash to meet its short-term obligations.
Owing to such tailwinds, shares of JOBY have rallied 27% over the past year compared with the Zacks Transportation – Airline industry’s 16.3% growth.
Image Source: Zacks Investment Research
JOBY: Key Risks to Watch
Joby Aviation is facing rising operating expenses, a challenge compounded by its history of high costs. Increased research and development spending, along with higher selling, general and administrative expenses, are driving up operating costs. In 2023, operating expenses rose 20.6% year over year. In 2024, the metric increased 26.2% year over year.
Joby Aviation’s financial stability and ability to fund its operations and growth largely depend on receiving continued investments. While these investments are beneficial for the company, they also highlight its reliance on external sources of funding to cover its costs and support its expansion efforts, rather than being fully self-sustaining financially.
JOBY’s Zacks Rank
JOBY currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the Zacks Transportationsector may also consider American Airlines (AAL - Free Report) and United Airlines (UAL - Free Report) .
American Airlines currently carries a Zacks Rank #2 (Buy)
AAL has an expected earnings growth rate of 23.5% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 37.1%. Shares of AAL have risen 25.6% over the past six months.
United Airlines currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
UAL has an expected earnings growth rate of 22.2% for the current year.
The company has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average surpriseis 22.9%. Shares of UAL have risen 87.2% in the past six months.