SerrNovik
Joby Aviation, Inc. (NYSE:JOBY) has had a long road since going public to developing an eVTOL (electric vertical take-off and landing aircraft) and turning into a revenue-producing company. The aircraft manufacturer went public via a SPAC in early 2021 and is finally set to fly in 2024. My investment thesis remains ultra-Bullish on the business taking flight over the next year.
Source: Finviz
Air Taxi Service Proven Out
Joby Aviation recently worked with NASA to prove out the air taxi concept. The company completed air traffic simulations with the DFW Central Terminal suggesting up 45 eVTOL aircraft could simultaneously be aloft at DFW airport, with 120 flights per hour.
The air traffic simulation supports the forecasts for massive air taxi operations in major cities. Joby Aviation originally forecast flights averaging 2.3 passengers operating ~12 hours a day, leading to $2.2 million in annual revenues per aircraft.
Source: Joby Aviation SPAC presentation
Archer Aviation (ACHR) had highlighted a plan for just 25 trips per day averaging 12 minute flights leading to $2.4 million in annual revenues per eVTOL. In both initial examples, costs have probably risen and the ability for air tax services to charge higher fares than proposed prices around $100 exist now.
The work with NASA confirmed air traffic congestion would indeed allow such scenarios for a relatively large amount of eVTOLs at an already very congested airport. The opportunity exists for substantial trips around major cities, such as from areas in NYC to Stamford or Greenwich in CT.
Source: Joby Aviation SPAC presentation
Based on the NASA simulation, Joby Aviation could likely hit the targets for having 850 aircraft in service by 2026 depending on manufacturing and passenger demand. The target dates probably have to be pushed back a year to 2027, but the company was still talking about $2+ billion in revenues at this point.
The company just announced a deal to partner with Atlantic Aviation to electrify locations in New York and Southern California around Los Angeles to provide air taxi services. Joby will install their Global Electric Aviation Charging System (GEACS) at those locations providing heliports for trips.
The company continues to make great progress to both make aircraft and line up spots for operating their air taxi service in 2025. Joby Aviation is currently building 3 aircraft at their location in California with the expectation being to soon deliver another aircraft to the Air Force and start generating revenue on multiple aircraft.
The certification process continues to make huge strides. Joby Aviation ended October with Stage 4 17% complete by the aviation company and Joby actively testing the aircraft, including with pilots on board.
Source: Joby Aviation Q3’23 shareholder letter
Set For 2024
The company appears all set for 2024, with this being the year where FAA certification and air taxi service launch occurs. Or at least, the vast majority of steps to achieve these goals occur over the next 12 months. The question now is far more when, not if.
The stock now has a market cap of $4 billion with Joby Aviation having a cash balance of $1.1 billion. The company is burning $360 million this year and costs will ramp along with the production facility being built in Dayton, though government assistance and a federal loan will cover the majority of those construction costs of up to $500 million over time.
Revenues will slowly ramp, but Joby Aviation has forecast a business quickly soaring into the $2+ billion range due to selling aircraft at up to $5 million a pop. Not to mention, the deal with Atlantic Aviation sets up the company for the launch of air taxi service where aircraft will generate revenue per flight, while the consensus estimates have 2024 revenues reaching $25 million, primarily due to the aircraft delivered to the Air Force.
This pre-revenue company is still highly risky. Joby Aviation, Inc. won’t be profitable for years, and revenue ramps remain difficult to forecast, with air taxi services looking to develop a whole new category of travel moving beyond restricted operations of helicopters.
Takeaway
The key investor takeaway is that Joby Aviation remains a Buy trading at the lows for the year. The business now appears on an inevitable path towards full launch in the next year, and the stock trades far below the original going public price of several years ago.
Joby Aviation: It All Starts In 2024
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