Joby Aviation Soars 71% in 6 Months: Time to Buy the Stock?

California-based transportation company Joby Aviation JOBY is a leading player in the electric vertical takeoff and landing (eVTOL) space. The company aims to offer a faster, smarter and cleaner way of transporting people around congested areas.  JOBY shares have performed exceedingly well lately, driven by the enthusiasm surrounding the future of urban air mobility, which refers to a method of transportation that utilizes the airspace above an urban area to move people and goods. This is mainly done through eVTOLs and drones.With the eVTOL-related buzz picking up, shares of JOBY have gained 71.1% over the past six months, handily outperforming its industry. Another eVTOL-focused stock Archer Aviation ACHR has performed even better, surging 133% in the same timeframe.Six-Month Price ComparisonImage Source: Zacks Investment ResearchTechnical indicators suggest continued strong performance for JOBY. The stock trades above its 50-day and 200-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in JOBY’s prospects.Moving Average Data of JOBY StockImage Source: Zacks Investment ResearchWith JOBY riding high, individuals may rush to add the stock to their portfolio. However, before making any investment decision, it would be prudent to delve deeper and analyze JOBY’s growth prospects and the associated risks.Bullishness on eVTOL Sector Drives JOBY StockWith cities becoming more and more congested, the demand for more efficient and eco-friendly transportation solutions is on the rise. This is a huge positive for the eVTOL market whose huge potential can be gauged from the fact that it is reportedly projected to increase from $1.76 billion in 2024 to $24.1 billion by 2031, at a CAGR of 51.6% between 2023 and 2031.eVTOLs have the potential to revolutionize urban transportation by bypassing congested ground traffic and utilizing vertical space for faster, point-to-point travel. By utilizing the vertical space, the usage of eVTOLs can bring about a reduction in noise pollution and lower carbon emissions.Joby Aviation, a key player in the space, is focused on developing an electric "flying taxi" for commercial use. JOBY has made significant strides toward starting its manufacturing operations. To this end, the company acquired an existing facility at Dayton International Airport earlier this year. Production at the facility is expected to start early next year.Joby Aviation plans to develop facilities capable of producing up to 500 eVTOL aircraft annually in Dayton. This strategic move underscores Joby Aviation's commitment to scaling up its production capacity and meeting the demand for electric air taxis. Also, it demonstrates the company’s tangible progress toward commercializing its electric air taxis.Key Partnerships Bode Well for JOBY’s AmbitionsJoby Aviation is well-served by its association with the Department of Defense or DOD, Toyota TM and Uber Technologies UBER. In October, Japan’s auto giant Toyota announced its decision to invest a further $500 million in Joby.  The $500 million commitment will be delivered in two tranches, with the first installment expected by the end of this year and the second by 2025. It will bring Toyota’s total investment in Joby to $894 million, further cementing their partnership. This capital injection aims to expedite JOBY’s certification process and commercial production. Joby Aviation aims to launch its first commercial service in Dubai by 2025. In September, the company applied to become the first Certified Electric Air Taxi Operator in the UAE. Earlier this year, JOBY inked a definitive agreement with Dubai’s Road and Transport Authority to introduce air taxi services in the Emirate by early 2026, with initial operations aimed for 2025. A few years ago, Uber invested $75 million in Joby Aviation and sold its air taxi division, Elevate, to the latter.Challenges for JOBY                                         Joby Aviation is unlikely to be profitable any time soon as commercial production is not expected before 2025. In its path toward commercialization, JOBY is unlikely to escape turbulence as it navigates regulatory approvals, infrastructure development and adoption by consumers.In the absence of commercialization, there is no real demand for urban air mobility at present. Only time will tell, how the market and customer demand for eVTOLs turn out to be. Additionally, the risk of battery failure due to high voltage and thermal issues is highly existent for eVTOL aircraft. JOBY Shares Trading at a PremiumJOBY stock is not so cheap, as its Value Score of F suggests a stretched valuation at this moment.In terms of price-to-book value, JOBY is trading at 8.92X, higher than its 3-year median of 3.37X and the industry’s 4.94X.Image Source: Zacks Investment ResearchWhat Should Investors Do With JOBY Stock?JOBY's electric air taxi offers a promising solution for urban air mobility, addressing the growing demand for sustainable transportation alternatives. With its ability to carry a pilot and four passengers at speeds of up to 200 mph, the eVTOL aircraft presents a compelling value proposition for commuters seeking efficient, environment-friendly travel options.However, with commercialization still some distance away, it's anybody’s guess how the market demand for eVTOL eventually shapes up. Also, JOBY’s stretched valuation makes it a risky bet currently. As a result, we do not advise buying this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Instead, investors should monitor the company’s developments closely for an appropriate entry point. For those who already own the stock, it will be prudent to stay invested. The stock’s current Zacks Rank supports our thesis.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. 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