3 Reasons to Buy Joby Aviation Stock Like There's No Tomorrow

Joby Aviation (NYSE: JOBY) presents one of the most compelling investment opportunities for investors seeking to build a broad, diversified portfolio of high-risk/high-reward stocks. The company is making real progress on developing its vertically integrated transportation-as-a-service (TaaS) business.

There are three key reasons why it can emerge victorious in the highly competitive electric vertical take-off and landing (eVTOL) market.

1. Joby Aviation has the right partners for its business model

As a reminder, unlike many of its peers, Joby doesn't aim to sell its eVTOL to third parties. Instead, its plan is to develop and manufacture its own eVTOL (without relying extensively on aviation technology partners) and own and operate them within its own transportation network.

Image source: Joby Aviation.

The two aims are part of a reinforcing system that allows Joby to retain complete control over the safety, quality, design/redesign, and maintenance of its own-operated eVTOL. It also has the ideal partners to fulfill this business model. That's why it partnered with Uber Technologies (which has also invested in Joby), and why Joby bought Blade's urban air mobility passenger business. Joby wants to build out an air passenger service ahead of integrating its eVTOL into the network.

It's also the reason why Toyota Motor has invested in Joby and is working with it to provide its world-class manufacturing expertise. In fact, Joby CEO JoeBen Bevirt said the two companies had recently formed "a joint venture that lays the groundwork for high-volume commercial production." Moving forward, Toyota is set to invest $250 million in Joby and will work together with Joby to scale eVTOL production.

2. The Blade acquisition supports future growth

If Joby's TaaS model works, it will not only need to obtain Federal Aviation Administration (FAA) certification for its eVTOL but also successfully integrate and develop the Blade air mobility business in preparation for seamlessly introducing eVTOL offerings into Blade's existing helicopter and charter jet transportation services.

The good news is that the Blade integration is exceeding expectations. In fact, during the recent earnings call, Bevirt said that "the core constraint we're facing on many routes is now aircraft availability rather than passenger demand." He also noted a 50% increase in seats sold in the second quarter compared to the same period last year.

Bevirt also noted some fascinating color on the growth in Blade passengers traveling to airports, saying, "This quarter also saw the highest number of new flyers going to and from New York City airports since 2023, while route expansions contributed to more than 40% year-on-year growth in Hamptons revenue."

While the soccer World Cup undoubtedly helped Blade, the strength of transportation to airports is a major plus, considering that early in the year, United Airlines CEO Scott Kirby had made some disparaging remarks on the growth of eVTOL taxis to airports. Those comments were concerning for Joby's peer and United Airlines partner, Archer Aviation. However, Joby's airline partner, Delta Air Lines, appears to still be fully on board with integrating Joby's eVTOL into its customer experiences. For reference, Delta is also an investor in Joby.

Image source: Joby Aviation.

3. Joby leads the FAA certification race

Given that Joby is developing its own technology while most of its peers are leaning into existing aviation companies' expertise, you might think it would be lagging in the certification race. However, Joby is ahead. In fact, it's making progress on the fifth and final stage of type certification, according to management.

Bevirt also recently confirmed that Joby's fleet includes "our first FAA-conforming aircraft." This is a critical point because it means the aircraft is ready for flight testing under Type Inspection Authorization (TIA) with FAA pilots.

A stock to buy

To be clear, Joby Aviation is a loss-making company in a competitive industry, and according to the Wall Street consensus from Visible Alpha, it won't be profitable or cash-generative until 2032. That's a long time to wait for many investors.

Still, if its air taxi business starts taking off in 2027 as expected, there will be no shortage of interest, and it won't be long before investors start penciling in accelerated profitability and a long-term stream of recurring revenue and earnings from its TaaS model. That makes Joby stock a good part of a speculative investor's portfolio.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool recommends Delta Air Lines and Uber Technologies. The Motley Fool has a disclosure policy.