For a company that aims to operate quiet, emission-free eVTOLs in major cities around the world, Joby Aviation (NYSE:JOBY) generated quite a bit of noise this past week.
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The company announced a Memorandum of Understanding with the Saudi Arabian conglomerate Abdul Latif Jameel to provide up to 200 aircraft and related services – in a deal that could be worth roughly $1 billion.
The company’s share price jumped up by double digits following the announcement, though it has since slid back down to earth somewhat. All told, JOBY has gained almost 50% since hitting an early April low point.
While the overall improvement in market sentiment has boosted JOBY, there have been other factors at play. This includes progress towards FAA certification, a new partnership with Virgin Atlantic for a future UK service, and expanded manufacturing and flight testing.
All that being said, the company remains a bet on the future, reminds investor Julia Ostian. Though she likes what she sees, the investor isn’t quite ready to offer a full-throated endorsement just yet.
“JOBY stock is a high-risk, high-reward speculative play—not for value investors, but for those willing to bet on a revolutionary technology,” explains Ostian.
The investor is happy to acknowledge the company’s technical progress and series of high-profile partnerships. While there is clearly a strong potential, Ostian has a hard time visualizing JOBY aircraft in markets beyond New York and Dubai — the “cities are the ones where people use helicopters.”
And then there is the issue of JOBY’s valuation, which Ostian notes cannot be based on traditional metrics as the company did not report any revenue in Q1 2025.
“The only problem in this bullish story is that the company hasn’t made any sales yet. Joby’s market cap is almost $7 billion. For the company that never earned anything. This is wild,” adds Ostian.
Moreover, the investor offers a warning that despite the excitement of the Saudi announcement, a Memorandum of Understanding is not exactly a legally binding contract. It could be exceptionally lucrative, but it could also amount to nothing.
At the end of the day, that basically mirrors the risk assessment investors will have to make regarding the company, sums up Ostian.
“Joby is one of those companies that trade on dreams about the future and promises that may or may not be fulfilled,” concludes Ostian. Nevertheless, Ostian is willing to take a flyer on JOBY, giving the company a Buy rating. (To watch Ostian’s track record, click here)
Though not unanimous, Wall Street also tends to think that JOBY is worth the risk. With 4 Buys, 2 Holds, and 1 Sell, JOBY enjoys a Moderate Buy consensus rating. Its 12-month average price target of $8.29 has an upside of ~5%. (See JOBY stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.