Joby Aviation (NYSE: JOBY) The stock posted big gains during Tuesday’s trading. The flying taxi specialist’s share price ended the daily trading session up 12.8%. Meanwhile, the S&P500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (DJINDICES: ^DJI) The index ended the day’s trading up 0.4% and 0.28% respectively.
Joby’s valuation rose today after Needham initiated coverage on the stock with a buy rating and a one-year price target of $8 per share. Even after today’s gains, the company’s price target suggests near-term upside of about 26%.
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At the start of reporting on Joby, Needham said the company was seen as the likely winner in the race for an early share of the flying taxi market. Needham looks at Joby’s collaboration with Uber as a key competitive advantage, and it also has a favorable view of the company’s ElevatOS software platform.
Notably, Needham also started reporting on it Sagittarius Aviation with a bullish rating today. Archer is one of Joby’s most high-profile competitors in the flying taxi space, but Needham clearly doesn’t view the market as a winner-takes-all category.
Joby’s business is still in a pre-revenue status and the company is still preparing key components to move forward with commercialization. Despite being in a relatively young state, the flying taxi specialist has a market capitalization of around $4.8 billion. Crucially, the company must still obtain approval for its vehicles from the Federal Aviation Administration (FAA) and other regulators in other countries where it plans to market its flying taxis.
Gaining approval from the FAA and other regulators in major markets is central to the bull thesis on Joby Aviation stock. The regulatory outlook actually looks promising, and Needham is generally optimistic about the evolving regulatory environment in the sector. Joby has a highly growth-dependent valuation, but its shares could see significant gains combined with favorable regulatory developments and progress in commercial implementation.
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