Earnings season is about to kick off for air mobility players Joby Aviation Inc (NYSE:JOBY), Archer Aviation Inc (NYSE:ACHR), and Blade Air Mobility Inc (NYSE:BLDE).
According to JPMorgan analyst Bill Peterson, advanced air mobility (AAM) stocks are at a pivotal point, with certification hurdles, capital demands, and strategic partnerships set to dominate upcoming earnings calls.
Here's what investors can expect as these pioneering companies prep for their third-quarter "flight plans."
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Investors Keep A Close Watch On Certification, Cash Burn
Investor sentiment in AAM has been slowly climbing, but certification delays for eVTOL (electric vertical takeoff and landing) aircraft remain a persistent drag. Certification is both capital- and time-intensive, and without a clear timeline from U.S. and European regulators, institutional investors are increasingly focused on which players have the balance sheet strength to navigate the long runway to commercialization.
Peterson notes that investor inbounds have spiked recently, with key questions centering on catalysts expected over the next six to 12 months. The recent $500 million Toyota Motor Corp (NYSE:TM) investment in Joby Aviation shows confidence in its tech and timeline, though short interest remains elevated at 18%, while Archer's recent capital raise could prompt scrutiny on funding stability—especially as ACHR's short interest stands at a lofty 27%.
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Earnings Catalysts: Certification Progress, Strategic Partners, Cash Flow
Earnings reports this quarter will likely serve as updates for each company's progress on four major fronts:
- Certification advancements
- Strategic partnerships
- Cash burn, and
- New commercial or defense contracts.
Investors are eager for clarity on FAA milestones, with the agency recently loosening some eVTOL pilot training requirements that could have otherwise delayed timelines.
Blade, rated Overweight by JPMorgan, stands out for its diversified business model, including its medical transport services. The capital-light setup gives Blade a potentially clearer path to profitability compared to its peers. With only 7% short interest, investors seem relatively confident in Blade's resilience, particularly given its lower funding risk.
Election Impact? Minimal, Say Analysts
Interestingly, the upcoming U.S. election appears to be less of a concern for AAM stocks, with only 17% of surveyed investors expecting election outcomes to impact the AAM sector significantly.
That's a stark contrast to higher election exposure concerns across other tech sectors, suggesting investors see air mobility's long-term trajectory as less politically sensitive, for now.
Stock Forecasts, Ratings
Peterson has rolled forward his price targets, accounting for valuation adjustments in the context of multiple compressions. Here's the breakdown:
- Joby Aviation: Rated Neutral, with a price target of $5. Despite the Toyota investment, short interest and funding risks are on investors’ minds. Certification milestones will be crucial for maintaining investor confidence.
- Archer Aviation: Rated Overweight, with a price target of $6. While Archer has raised capital, Peterson believes the company can close its valuation gap in the long term.
- Blade: Also rated Overweight, with a $6 price target. Blade's diversified revenue model and medical transport services make it a relative safe bet in the volatile AAM space.
What’s Next For Air Mobility?
For AAM stocks, the path forward hinges on regulatory clarity, investor patience, and continued capital access. While this earnings season may not resolve the sector's biggest questions, a few well-placed updates could send shares soaring—or struggling to stay afloat.
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Image via Joby Aviation
