Why Joby Aviation Stock Jumped 86% in November

Shares of Joby Aviation (NYSE: JOBY) were soaring last month as optimism grew for the electric vertical takeoff and landing (eVOTL) industry.

The primary catalyst appeared to be a buy rating from Needham, which helped legitimize the development-stage sector that also includes Archer Aviation. Joby still does not generate material revenue, and the airborne vehicles, which are similar to advanced helicopters, have yet to be commercialized, though Joby is aiming to do so in 2025.

In October, the FAA also cleared the way for the new vehicles to take flight, issuing a new set of regulations for the eVTOLs to be integrated into the aviation system. As a result, the stock finished the month up 86%, according to data from S&P Global Market Intelligence.

As you can see from the chart below, shares surged toward the end of the month, following the Needham report.

^SPX data by YCharts

Joby is on the rise

As the chart above shows, Joby's gains came primarily in the second half of the month, driven by the buy rating from Needham.

The research firm gave the stock a price target of $8 and said the company was best positioned to win market share in the early air taxi market due to its partnership with Uber following its 2020 acquisition of Uber Elevate, which was Uber's eVTOL ride-sharing project.

Joby is already testing and demonstrating its Elevate software platform for its air-based ride-sharing platform. Needham also projected a $3 billion annual revenue opportunity in air taxis by 2029.

Also last month, Cathie Wood's Ark Invest bought 304,000 shares of Joby, which could help bring investors into the stock, especially those who follow her closely. Earlier in November, Joby began construction of its first vertiport the Dubai market, making progress on what could be a valuable eVOTL market.

The company also completed its first exhibition flight with partner Toyota in Japan, and reported third-quarter results earlier in November, which included its first international flight demo.

However, it was the Needham note that seemed to excite investors. The stock jumped 60% over the rest of the month after the report came out, climbing 13% on Nov. 19.

Image source: Getty Images.

What's next for Joby

Joby started off December giving up those gains as the stock fell 9.4% on Dec. 2, even though there was no news out on the company. Instead, the move seemed to indicate that the rally in eVOTL stocks was overdone following last month's surge.

After hours, the stock fell another 2.3% after CFO Matthew Field said he was leaving to take the CFO position at Oshkosh. While that's not a red flag, it's not encouraging to see top management leaving for other jobs.

Joby shares will continue to be volatile as the company gets closer to commercialization. As the apparent leader in eVOTL vehicles, Joby seems to have an edge, but the stock remains high risk until the market for these short-distance rides is proven.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.