What happened
Joby Aviation (JOBY 0.22%) recently provided more evidence that it's the horse to back in the race to bring so-called "flying cars" to the masses, and investors responded by buying in. Shares of Joby rose by 28.8% in March, according to data provided by S&P Global Market Intelligence, boosted by a steady stream of positive announcements.
So what
Joby is developing a small electric airplane capable of vertical takeoffs and landings -- an eVTOL. It's one of a number of companies working on such efforts that have joined the public markets in the last 18 months, mostly via mergers with special purpose acquisition companies (SPACs). This influx has created a lot of excitement around the technology, but also suggests there will eventually be a lot of competition in the eVTOL market.
Image source: Joby Aviation.
Last month, Joby announced that it had moved into the fourth stage of the Federal Aviation Administration's five-stage approval process. That keeps it ahead of its peers, and on track to launch a commercial product as soon as next year. It's also still on schedule to debut its planned aerial ridesharing service as soon as 2024. And the company has restarted testing following a setback in February.
Joby's fourth-quarter results, which came out late in the month, helped make the case that it remains en route to its destination. The company reported an adjusted EBITDA loss of $65.2 million, as expected, but overall used less cash than expected, and still has nearly $1.3 billion in the bank to continue the development of its aircraft.
Now what
These eVTOLs are not the flying cars imagined in The Jetsons, but the technology offers a lot of potential for travelers to overfly traffic, and could replace small planes on shorter trips. There is very likely a market for such vehicles, but there's a lot of uncertainty about which companies will capture it.
It is still too soon to say for sure, but Joby's chances do look better than most. It's well ahead of most of its competitors in terms of FAA certification, has an industry-best balance sheet, and has partners such as Toyota Motors and Uber Technologies, which can lend it their expertise in manufacturing and ridesharing, respectively.
Given the potential, it could make sense for investors to add a small position in an eVTOL company to a well-diversified portfolio. For those looking to go that route, there appears to be no better choice than Joby.
