Joby Aviation, Inc. (JOBY): A Bear Case Theory

We came across a bearish thesis on Joby Aviation, Inc. (JOBY) on Substack by Charly AI. In this article, we will summarize the bears’ thesis on JOBY. Joby Aviation, Inc. (JOBY)'s share was trading at $6.31 as of May 1^st.

Joby Aviation (JOBY) is at the forefront of the electric vertical takeoff and landing (eVTOL) revolution, leveraging strategic partnerships with Toyota and Delta and making steady regulatory progress. Its vertically integrated model is designed to streamline development and manufacturing, placing the company in a strong position to benefit from the future growth of urban air mobility. However, despite the long-term promise, JOBY's near-term outlook is clouded by intensifying financial pressures. In 2024, the company posted a steep loss of $608 million, largely due to a 30% surge in R&D spending to $477 million while revenue nearly vanished, dropping 87% to just $136,000. Though the company maintains a healthy cash balance of $933 million and carries no significant debt, this cushion is shrinking quickly, with operations heavily reliant on equity issuance—leading to a 12% dilution in shareholder value.

Technically, the stock reflects this uncertain backdrop, trading below key moving averages (50-day: $7.05, 200-day: $6.42) and showing bearish momentum through a negative MACD, though an RSI of 40.65 indicates it may be nearing oversold territory. These signals, combined with a stretched price-to-book ratio of 5.54 and limited revenue visibility, raise red flags for near-term investors. Regulatory delays, capital intensity, and mounting competition in the eVTOL space amplify the risks, making profitability a distant goal. While JOBY may ultimately benefit from first-mover advantages and strong corporate backing, the current fundamentals do not support a favorable risk/reward profile. Investors with a long-term horizon and high risk tolerance might choose to hold in hopes of eventual market adoption, but for most, the prudent action is to stay on the sidelines. The combination of escalating losses, dilution, weak technicals, and speculative valuation leads to a clear near-term recommendation: SELL.

Joby Aviation, Inc. (JOBY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held JOBY at the end of the fourth quarter which was 12 in the previous quarter. While we acknowledge the risk and potential of JOBY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than JOBY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.