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Vertical Aerospace (EVTL)
NYSE:EVTL
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Vertical Aerospace
(NYSE:EVTL)
Rating:25Underperform
Price Target:―
Positive Factors
Market Opportunities
The development of a long-range 1,000 mile hybrid-electric vertical-take-off-and landing variant of its VX4 aircraft aims to unlock new market opportunities in defense, logistics, and other commercial applications.
Partnerships
Vertical has expanded its existing partnership with Honeywell toward certifying two of the most critical systems on the VX4 that make it safer and easier to fly, with a potential $1B in projected contract value through 2035.
Valuation
Vertical Aerospace Ltd. is significantly undervalued relative to some of its peers while being in line with, or even ahead of, them with respect to the stage of execution, quality of engineering and design, operational efficiency, and customer interest.
Negative Factors
Capital Requirements
The company plans to execute another capital raise to support ongoing VX4 development and certification.
Financial Performance
Vertical Aerospace reported an operating loss of (£26.9M) and a net loss following adjustments in fair value associated with convertible senior notes.
Financial Projections
It is apparent that the company will require additional capital, which has been considered in the financial projections.
Vertical Aerospace (EVTL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$472.08M
Dividend YieldN/A
Average Volume (3M)264.60K
Price to Earnings (P/E)―
Beta (1Y)2.53
Revenue GrowthN/A
EPS Growth23.26%
CountryUS
Employees350
SectorIndustrials
Sector Strength90
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.62
Shares Outstanding84,602,720
10 Day Avg. Volume463,006
30 Day Avg. Volume264,596
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)-0.10
Price to Sales (P/S)0.00
P/FCF Ratio-5.15
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.50Price Target Upside161.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Vertical Aerospace Business Overview & Revenue Model
Company DescriptionVertical Aerospace (EVTL) is an innovative aerospace company focused on revolutionizing urban air mobility. Specializing in the design and manufacture of electric vertical take-off and landing (eVTOL) aircraft, the company aims to transform the future of urban transportation by offering zero-emissions, fast, and efficient travel solutions. Vertical Aerospace operates within the aerospace and transportation sectors, providing cutting-edge technology to address the growing demand for sustainable urban air travel.
How the Company Makes MoneyVertical Aerospace generates revenue primarily through the sale and pre-orders of its eVTOL aircraft to commercial airlines, urban mobility operators, and other transportation entities. The company forms strategic partnerships and agreements with key industry players to secure significant pre-order commitments, which serve as a primary source of income. Additionally, Vertical Aerospace may explore secondary revenue streams such as maintenance services, flight operation support, and software solutions for fleet management, although these are not yet fully developed. The company's success is bolstered by its collaborations with technology and aerospace leaders, which enhance its capabilities and market reach.
Vertical Aerospace Financial Statement Overview
Summary
Vertical Aerospace is facing significant financial challenges with persistent operational losses and a fragile balance sheet. While there has been some revenue growth, it is overshadowed by substantial losses and a negative equity position. The company's ability to generate cash remains weak, necessitating a focus on cost control and strategic initiatives to improve financial health.Income Statement
Vertical Aerospace has shown a modest revenue increase in the TTM period, with a revenue of $11.31 million compared to zero in the previous year. However, the company continues to operate at a significant loss, highlighted by a negative net income of $781.24 million. The gross profit margin is 67.21%, but the EBIT and EBITDA margins are deeply negative, indicating operational inefficiencies and high operating costs.20
Very Negative
Balance Sheet
The company's balance sheet reveals significant financial distress with a negative stockholders' equity of $499.34 million. The debt-to-equity ratio is undefined due to negative equity, and the equity ratio is also negative, signaling insolvency. Despite having a low total debt, the high level of liabilities relative to assets is concerning.15
Very Negative
Cash Flow
Cash flow analysis shows a negative free cash flow of $44.68 million in the TTM period, though there is a slight improvement compared to the previous year. The operating cash flow to net income ratio is negative, reflecting cash outflows and further challenging financial management. The firm struggles to generate positive cash flow from its operations.25
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.31M | 0.00 | 0.00 | 132.00K | 87.00K | 70.00K | Gross Profit |
| 7.60M | 0.00 | 0.00 | 68.00K | 43.00K | 4.00K | EBIT |
| -61.17M | -101.95M | -98.11M | -277.24M | -11.52M | -7.45M | EBITDA |
| -78.70M | -101.06M | -96.06M | -243.71M | -10.86M | -7.14M | Net Income Common Stockholders |
| -781.24M | -59.95M | -76.11M | -245.78M | -12.33M | -7.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 22.56M | 48.68M | 122.81M | 212.66M | 839.00K | 1.03M | Total Assets |
| 47.73M | 84.08M | 151.24M | 233.33M | 8.88M | 7.31M | Total Debt |
| 2.20M | 2.62M | 3.16M | 1.94M | 7.33M | 1.17M | Net Debt |
| -20.36M | -46.06M | -59.77M | -210.72M | 6.49M | 137.00K | Total Liabilities |
| 547.07M | 133.86M | 143.92M | 171.77M | 9.82M | 3.14M | Stockholders Equity |
| -499.34M | -49.78M | 7.32M | 61.56M | -938.00K | 4.16M |
| Cash Flow | Free Cash Flow | ||||
| -44.68M | -76.96M | -105.72M | -30.91M | -12.40M | -9.38M | Operating Cash Flow |
| -44.64M | -74.70M | -103.71M | -27.55M | -12.01M | -7.28M | Investing Cash Flow |
| 957.00K | 61.38M | -62.96M | -3.35M | -688.00K | -2.83M | Financing Cash Flow |
| -355.86K | 169.00K | 7.25M | 244.71M | 12.51M | 10.87M |
Vertical Aerospace Technical Analysis
Positive
5.17
Price Trends
3.98
Positive
5.26
Positive
6.16
Negative
Market Momentum
0.47
Negative
64.87
Neutral
65.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVTL, the sentiment is Positive. The current price of 5.17 is above the 20-day moving average (MA) of 4.60, above the 50-day MA of 3.98, and below the 200-day MA of 6.16, indicating a neutral trend. The MACD of 0.47 indicates Negative momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 65.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EVTL.
Vertical Aerospace Risk Analysis
Vertical Aerospace disclosed 76 risk factors in its most recent earnings report. Vertical Aerospace reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We may be unable to obtain the relevant regulatory approvals needed to produce and sell the aircraft on timelines we expect or at all. Q4, 2024
Vertical Aerospace Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $4.39B | 11.81 | 5.17% | 249.38% | 3.98% | -12.17% | |
56 Neutral | $12.00B | ― | -45.38% | ― | 64.98% | -10.52% | |
53 Neutral | $1.17B | ― | -25.68% | ― | 10.72% | 16.19% | |
52 Neutral | $1.29B | ― | -39.62% | ― | 285.43% | 32.57% | |
49 Neutral | $6.20B | ― | -73.89% | ― | ― | 17.43% | |
43 Neutral | $1.38B | ― | -148.98% | ― | ― | -2.94% | |
25 Underperform | $472.08M | ― | 115.25% | ― | ― | 23.26% |
* Industrials Sector Average
Performance Comparison
EVTL
Vertical Aerospace
5.44
-1.57
-22.40%
EH
Ehang Holdings
17.34
1.57
9.96%
EVEX
Eve Holding
4.40
-1.39
-24.01%
RKLB
Rocket Lab USA
25.82
21.60
511.85%
ACHR
Archer Aviation
10.60
7.32
223.17%
PL
Planet Labs PBC
3.69
1.83
98.39%
Vertical Aerospace Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: 8.39%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for Vertical Aerospace with significant achievements such as the hybrid aircraft announcement and progress in certification and partnerships. However, challenges remain regarding regulatory hurdles and financial management.Q1-2025 Updates
Positive Updates
Hybrid Aircraft Announcement
Vertical Aerospace announced a new hybrid aircraft with a range of 1000 miles, opening additional market opportunities in defense, cargo, emergency services, and long-range commercial missions.
Progress in Certification Process
The company is on track with the certification process, with all piloted flight tests expected to be completed by 2025, moving at pace through the certification process with the UK Civil Aviation Authority.
Record-Breaking Piloted High Speed Taxi Tests
Achieved record-breaking piloted high-speed taxi tests with the VX4 demonstrator, validating key systems under real world conditions.
Partnership with Honeywell
Formalized and expanded partnership with Honeywell to deliver flight controls and aircraft management systems, worth approximately $1 billion over the next 10 years.
Battery Development and Prospective Revenue
Advanced battery development, with batteries expected to be a major revenue stream, constituting 50% of future revenues with a gross margin greater than 40%.
Financial Efficiency and Planning
Continuing sector-leading capital efficiency, with net cash used in operating activities for Q1 2025 approximately $30 million, and cash spend guidance for the year unchanged at $110 million to $125 million.
Negative Updates
Potential Certification Delays
The hybrid aircraft will be certified separately and might experience a delay beyond the 2028 timeline set for the electric VX4 aircraft.
Cash Position
Closed the quarter with approximately $90 million cash and cash equivalents on hand, which may require careful management to avoid liquidity issues.
Regulatory Challenges
The need for extensive interaction with the UK Civil Aviation Authority, submitting around 20,000 pages of documentation, highlights the regulatory complexities involved.
Company Guidance
In the Q1 2025 earnings call for Vertical Aerospace, the company provided guidance across several metrics, emphasizing its strategic progress and future potential. They highlighted their ongoing advancements in the certification process, projecting completion by 2028 with piloted flight tests on track for 2025. Financially, Vertical Aerospace reported a net cash usage of approximately $30 million for Q1 and maintained their full-year spend guidance at $110 million to $125 million, with $90 million in cash and equivalents at the end of the quarter. Additionally, the company revealed plans for a hybrid aircraft with a 1,000-mile range, expanding market opportunities, and detailed their capital-efficient approach, spending 75% less than peers for a superior product. They also reiterated their robust order book with major partners and discussed the strategic decision to adopt the CCS charging standard, further enhancing their operational framework.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.