A company that grows 100-fold rarely looks like a 100-bagger at the beginning. Usually, it is small and unproven, with a business (or an idea for a business) that's hard to imagine and easy to dismiss.
Often, these companies became indisputable leaders. For example, Nvidia's and Microsoft's stocks have both produced over 10,000% returns throughout their lifetimes.
Joby Aviation (JOBY +1.81%) is not a 100-bagger. The stock has traded in the red since its 2021 market debut and has fallen over 55% since last year. And yet if history tells us anything, it's that companies like Joby deliver monster returns over decades.
NYSE: JOBY
Key Data Points
In a nutshell, Joby is trying to commercialize its electric vertical takeoff and landing (eVTOL) aircraft. This aircraft, also called an air taxi, would function like an Uber in the sky, transporting passengers to airports or destinations across cities. Joby is expecting people to choose its air taxi over traditional transportation, like cars and buses, because a short hop could turn a long drive through traffic into a much quicker trip.
Most 100-baggers have a long runway, meaning a massive total addressable market (TAM), and that's what makes Joby particularly interesting. In a 2021 report, Morgan Stanley research once estimated that the global eVTOL market could reach $9 trillion by 2050. Even if Joby captured a sliver of that opportunity, it would grow into the much larger company it is today.
Image source: The Motley Fool.
"Capture a sliver of the opportunity" seems like an understatement, however, as Joby is the front-runner of the eVTOL market in the U.S. It has logged more flight miles than its competitors and is further along in the FAA's certification process. Indeed, if eVTOLs catch on, Joby would be well positioned to benefit.
For Joby to turn into a 100-bagger, it needs to commercialize and scale its air taxi. That could be years, if not decades, away. If you're prepared to wait that long, this stock's long-term gains could be extraordinary.
