Needham analyst Chris Pierce initiated coverage on Joby Aviation, Inc. (NYSE: JOBY) at a Buy rating with a price target of $8.
The analyst says the company is well-positioned to capture early air taxi market share, supported by its partnership with Uber (NYSE: UBER) following the 2020 acquisition of Uber Elevate.
JOBY's focus on software, particularly the ElevateOS platform, is encouraging as it lays the foundation for their future air taxi network, adds the analyst.
Pierce says that he is optimistic about FAA air taxi regulation and see JOBY gaining market share compared to existing transportation options.
In particular, the FAA's Innovate 2028 plan underscores the long-term importance of the air taxi industry in the U.S., setting a foundation for domestic competitiveness.
JOBY's expectation to operate passenger flights in the UAE by late 2025 subtly pressures the FAA to align with their timeline, reducing the likelihood of significant delays in the U.S. regulatory approval process, which is currently anticipated for 2026, adds the analyst.
The analyst writes that he sees a $3 billion early-stage global air taxi revenue opportunity, driven by conservative eVTOL penetration of airport and metro transit trips, based on passenger data from the world's busiest airports and NYC metro area train ridership.
The model assumes just 25 basis points of industry penetration in 2029, with supply constraints easing and rider interest growing at accelerated rates due to the time savings offered by air taxis at comparable per-mile price points to current rideshare options, adds the analyst.
Pierce writes that JOBY's clean-sheet manufacturing and vertically integrated engineering approach are expected to drive lower aircraft COGS, enabling quicker payback periods and solidifying its leadership position in the air taxi industry.
The analyst anticipates multiple winners in the sector, with strategic crossovers and competition as go-to-market strategies evolve and end markets develop.
Investors can gain exposure to the stock via WisdomTree Trust WisdomTree Battery Value Chain and Innovation Fund (NASDAQ: WBAT) and ARK Space Exploration & Innovation ETF (NASDAQ: ARKX).
Price Action: JOBY shares are up 7.22% at $6.015 at the last check Tuesday.