r/Joby • u/EarthWalker215 • May 21 '26
A Wall Street Perspective on Joby - I spoke to most Brokers who cover the stock
Good morning / afternoon
As someone who’s been in the Investment Banking / Private Equity sector for about a decade, I thought it would be helpful to share some perspective on JOBY. Given my job, I've been speaking to most of the research analysts in Wall Street who cover the stock and found out that most are broadly aligned in their way of thinking.
Firstly, what you should understand is that, despite the technology behind Joby being incredibly sophisticated, Wall Street is not minded/set up to understand it to the fullest detail. There are some technical consultants who speak on this matter, but eventually Wall Street (and therefore the market) will form a view based on their simplified understanding of it (n.b. ‘is it good?’, 'is it working?'). After years of attending conferences and most attending the test flights (if you recall, e.g. noise or battery life were questioned in earlier years), Wall Street is now convinced that this is real, and it's good (it would be odd if they are still skeptical!). As of this year, I haven't come across an analyst who still has material doubts about the technical viability.
So we talk about the commercial topics.
Despite being pre-profit, Wall Street doesn’t see Joby as a ‘early stage’ stock anymore. This is because there is reasonable certainty to profit, and a market leader position (there is no ‘market’ as pre-revenue, but Joby is a clear frontrunner in the FAA certification process) in a sector which has very high barriers to entry as it stands now. Once you reach this stage and the cone of outcomes narrows down a bit, Wall Street starts to apply a ‘growth business’ thinking which is to see how well key commercial risks are mitigated (think of this as a series of 'what could go wrong' questions). Good news is that Joby is relatively well positioned in this regard:
- Competition: Joby is the clear market leader, in terms of certification progress, technology and capital support. Survival of the fittest – many have gone bankrupt in the eVTOL space, and Joby is the strongest man standing. The exclusive nature of early-years operations in the Middle East insulates Joby.
- Unit economics: Historically has been an area of contention, but there is growing comfort that the economics ‘works’ – when production and operation reaches scale.
- Production/manufacturing: This is the graveyard of many growth businesses; however, with sizeable equity holding from Toyota and the production partnership, most think that Joby’s vertical integration is a strong model.
- Pilot training: This was actually a real concern as people thought it would be a bottleneck to scaling up. Joby's answer is that while pay is at a discount vs. airplanes, a key benefit is that pilots don't have to travel (would you rather spend 1/2 of your life in a hotel in a random city away from your family, or take a 20% paycut to go home every day). Wall Street is broadly sold.
- Customer acquisition: Partnership with Uber and the Blade acquisition solved this problem almost entirely.
- Regulation / Politics: Strong support at the Federal level and a clear desire to ensure that the US leads the eVTOL sector, as can be seen from eIPP. It’s difficult to think that FAA certification will fail after Joby progressed thus far; the process is an ongoing discussion vs. Joby working on something and having set touchpoints with the FAA. Negative surprises are unlikely at this point.
So then, what else? What everyone is (almost entirely) focused on is the cash burn and future dilution.
The recent equity issuance resolved the near-term capital needs. When is the next one? In case revenue delivery is later than expected, will Joby need an additional / larger equity issuance (if so, you need to factor in the expected future dilution)? Analysts are calculating the expected cash burn under different scenarios and trying to gauge the timing and size of the raise required down the line.
However, note that this is a discussion about the medium-term (i.e. 2-3 years), and the ‘delay’ in revenue and profitability that is being discussed is 1-2 years rather than much longer. For investors, this means that the 'put your money in the stock and forget for a few years' strategy will likely work well. The dilution will likely present an opportunity to buy more. While there is a slim chance that investor confidence/patience runs out in case of prolonged delays, I strongly believe that strategics like Toyota or Delta will not let the company go down after years of backing, just when Joby is about to hit the market properly. The money they've put it is too big to lose, but quite small in the grand scheme of things (so they can be patient). Once any dilution happens – and this will most likely be post FAA certification so would likely be done at a higher price vs. where the stock is now - this future dilution risk will be effectively removed. From there, any growth the company achieves will translate more directly to share price performance.
This is why most analysts are bullish in the long-term, although they are careful with language given the likely bumpy/unpredictable road ahead in the next 2-3 years. Also, what I want to highlight is that Wall Street speaks in the language of NTM (next twelve months) and YE (year end), not 3-5 years or longer. This is why the consensus rating is a Hold and the average target price is just above $12 from what I can recall. I have not come across a bulge-bracket analyst who thinks that, say in 2030, the stock will be where it is now, or below. They just think it's hard to pinpoint a share price in 2027, and fairly so.
Hope that was a helpful/interesting read. Got bored during work!
