Imagine: A $7,500 investment in Tesla (TSLA +3.03%) at its IPO price (a split-adjusted $17 a share) in June 2010 would be worth more than $2.4 million today. If you missed that massive 32,200% return, a similar opportunity might be opening in Joby Aviation (JOBY +4.74%).
Like Tesla, Joby is trying to transform transportation with an electric vehicle. Instead of changing transportation on the ground, however, Joby is trying to do it through the air, with electric vertical takeoff and landing (eVTOL) aircraft.
Image source: Joby Aviation.
Also called "air taxis," eVTOLs could change consumer habits by offering a faster, less stressful, and more scenic way of traveling through cities. Instead of slogging through traffic in a car or dealing with delays on public transit, eVTOLs promise to shuttle travelers through the air along busy routes, saving an hour or more of travel time.
To give you an idea of the scale of Joby's business: Its eVTOL is designed to seat four passengers and a pilot. If we priced each seat at $50, then each flight would earn $200. Two flights per hour with 12 operating hours per day would generate $1.75 million per year, and 6,000 of these aircraft would generate about $10.5 billion.
NYSE: JOBY
Key Data Points
Passenger transportation will be Joby's focus, but not its only business. It wants to expand into defense, cargo, logistics, and emergency-response services, and possibly sell aircraft to other operators.
A tenfold gain in Joby stock would make it a $60 billion company, and a $7,500 investment would become $75,000 at that valuation.
It's possible Joby will grow tenfold from today. But unlike Tesla in its early days, Joby doesn't have a flagship "Roadster" to sell: It's still working to gain FAA certification for its eVTOL, and it isn't even close to scaling up to commercial operations yet.
That makes Joby risky right now: I wouldn't recommend the stock to everyone. If you have a long time horizon and want to be aggressive in a nascent industry, Joby could be worth a small position.
