Joby shares downgraded after sharp rally, high valuation concerns

Investing.com --Joby Aviation shares were downgraded by analysts given the electric aircraft maker stock’s steep run-up and concerns about near-term upside at current levels.

HC Wainwright cut its rating on Joby to Neutral from Buy, noting the stock had surged nearly 400% since the firm initiated coverage last September.

The brokerage said the rally had priced in multiple key milestones including progress on test flights, regulatory approvals, and manufacturing, that are still several quarters away.

The stock needs to digest the significant gains that have materialized in a short period, according to HC Wainwright, which maintained a positive view on the company’s long-term potential.

Canaccord Genuity also moved to a Hold rating, calling the current valuation “challenging” despite Joby’s continued progress toward FAA certification and ramp-up of aircraft production. The firm kept its price target at $17, slightly below current price.

Joby is developing electric vertical takeoff and landing (eVTOL) aircraft for passenger and medical transport.

The company is preparing for the fifth and final stage of FAA certification and expects to begin for-credit flight testing in 2026. It aims to launch commercial operations by late 2026 or early 2027.

In the June quarter, Joby posted a net loss of $325 million, which included a large one-time charge related to warrant revaluation.

Operating expenses rose as the company increased production and testing of its aircraft. Joby ended the quarter with nearly $1 billion in cash.

Both brokerages said Joby may consider raising equity, given the recent stock performance and funding needs ahead of commercialization.

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