Cantor Fitzgerald has downgraded Joby Aviation (JOBY), a manufacturer of electric vertical takeoff and landing (eVTOL) aircraft, from a Buy rating to Hold, with a price target set at $9. This adjustment follows a significant decline of nearly 8% in JOBY’s stock on Thursday after the downgrade. Despite the recent drop, the stock has experienced a remarkable rise of 26.5% over the past month and is up 9.1% year-to-date, largely fueled by a favorable executive order and new partnerships.
The executive order in question directs the U.S. Transportation Department to create a program aimed at accelerating eVTOL operations, which is advantageous for companies like Joby and Archer Aviation (ACHR). In addition, Joby Aviation recently entered a Memorandum of Understanding (MoU) with Abdul Latif Jameel, with the potential to deliver up to 200 of its aircraft to Saudi Arabia, a deal valued at approximately $1 billion.
While Cantor analyst Andres Sheppard acknowledges Joby’s strong market position due to its partnerships with major companies such as Toyota and Delta Air Lines, he also cites concerns over the current valuation after a substantial rally of about 60% over the past three months. Sheppard emphasized that the current trading levels may not attract investors as a suitable entry point.
Joby Aviation holds a solid liquidity position, closing Q1 2025 with about $1.3 billion in total liquidity. However, the company is facing one of the highest cash burn rates in its sector, with expenditure projections between $500 million and $540 million for 2025. Furthermore, delays in securing full FAA Type Certification could push that milestone to at least the latter half of 2026, raising concerns about the company’s unit economics, including air taxi service pricing and deployment costs.
Wall Street analysts maintain a Moderate Buy consensus rating on JOBY stock, reflecting three Buy, three Hold, and one Sell recommendations. The average price target of $8.86 suggests that the stock is nearing its fair value.
In light of the ongoing developments, there remains potential for growth in the eVTOL sector, especially as regulatory frameworks evolve and partnerships expand. Joby Aviation’s innovative technology and strategic collaborations position it favorably for future success in the burgeoning urban air mobility market.