JOBY Buy Alert: Get ready and buckle up with Joby Aviation stock

When a company is a pioneer in an emerging industry, it is forgivable if that company’s financials are not perfect. Therefore, investors need to be patient and forgiving towards the air taxi manufacturer Joby Aviation (NYSE:JOBY). Of course, Joby Aviation stock carries risks and volatility, but a small portfolio allocation could yield huge returns.

Joby Aviation is a leader in the air taxi industry. The company has agreements with the US Air Force as well as three government agencies in Abu Dhabi, United Arab Emirates.

So if you want to bet on the future of air taxis, Joby Aviation is a very sensible choice. With this in mind, let us explore the latest operational and financial developments with Joby Aviation.

Two milestones for Joby Aviation

First, let’s start with some exciting news for Joby Aviation. The company recently broke ground on the expansion project for its manufacturing facility in Marina, California. This expansion is expected to “more than double” Joby Aviation’s “manufacturing footprint at Marina Municipal Airport.”

Joby Aviation is not required to fully fund this expansion project. That’s because it is funded in part by a $9.8 million California Competes grant awarded to Joby Aviation.

In other positive news, Joby Aviation has officially completed its pre-production flight test program. In the company’s next phase, Joby Aviation will “use its production aircraft prototypes to prepare for upcoming flight tests on credit.”

The end goal, of course, is for Joby Aviation to receive full certification from the Federal Aviation Administration. Don’t expect this to happen tomorrow or next week. Clearing regulatory hurdles in an emerging industry is a time-consuming endeavor, but Joby Aviation is showing steady progress.

Can you forgive Joby Aviation’s financial mistakes?

Before you hit the buy button on Joby Aviation stock, I strongly recommend that you read the company’s first quarter shareholder letter. Don’t just look at the pretty pictures of Joby Aviation’s air taxis and marina production facility.

Scroll to the section that displays the details of Joby Aviation’s financials. This serves as a reminder that there are risks to Joby Aviation’s investors.

Being at the forefront of an emerging industry often means that a company must spend money today to make money later. This is apparently the case with Joby Aviation. The company’s operating expenses increased to $145.922 million in the first quarter of 2024 from $99.716 million in the year-ago quarter.

I will not insist that Joby Aviation must embark on a cost-cutting mission. Investors will simply have to accept that Joby Aviation will have to spend money to obtain FAA flight certification and commercialize the company’s air taxis.

You should also know that Joby Aviation suffered a net income loss of 14 cents per share in the first quarter of 2024. For what it’s worth, that’s better than the 19 cents per share loss Joby Aviation suffered in the year-ago quarter.

These aren’t great results, but that’s why I urge investors to be patient and consider their risk tolerance.

Joby Aviation Stock: Target $10 and Not a Penny Less

Previously, I set a price target of $10 for Joby Aviation. I stand by that statement, but there will be volatility along the way, including some tensions and surprises.

If the skies are one day filled with air taxis, Joby Aviation will be a pioneer in the industry. This means Joby Aviation stock has the potential to reach $10 and probably much more.

So keep your eyes on the prize and the sky. Think long and hard about your risk tolerance, consider buying some Joby Aviation shares, and buckle up for a ride of a lifetime.

At the time of publication: David Moadel did not have, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.