While everyday mobility generally occurs on the terrestrial realm, the vertical axis opens up several possibilities, thereby bolstering the basic case of eVTOL stocks. With electric vertical takeoff and landing aircraft, people can quickly and conveniently get to their destination. Better yet, these flying car stocks present holistic value.
Yes, when it comes to flying vehicle stocks, I suppose you can technically include helicopters in the mix. However, they’re loud – and when there are several in the area, they can impose nuisances on folks down on earth. In addition, helicopters aren’t exactly zero-emission vehicles. With eVTOLs, the platform is delivering the same benefits as electric vehicles but in the skies.
Further, let’s talk about the numbers behind air mobility stocks. According to MarketsandMarkets, the eVTOL market size could grow from $1.2 billion in 2023 to $23.4 billion by 2030. If so, that would represent a compound annual growth rate (CAGR) of 52%. And that might be on the conservative side, with Grand View Research projecting the air mobility market to hit $137.11 billion by 2035.
Fundamentally, the paradigm is shifting. Below are eVTOL stocks to consider.
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Let’s get something out of the way first. Japanese automotive giant Toyota (NYSE:TM) isn’t exactly a pure-play idea for eVTOL stocks. And to be sure, it has an “interesting” relationship with electric-powered mobility. Toyota Chairman Akio Toyoda continues to express his skepticism over EVs as sector sales decline amid tough economic conditions. Still, investors might not want to conflate EVs with air mobility endeavors.
For one thing, Toyota extended its partnership with eVTOL developer Joby Aviation (NYSE:JOBY) regarding a long-term supply arrangement. Ultimately, the mutual goal centers on reaching mass production of electric passenger aircraft in the U.S. Second, Toyota continues to conduct research and development regarding solid-state batteries. Should it be successful, such a rousing technology could translate to air mobility. Thus, it’s an intriguing idea for flying car stocks.
And frankly, it’s a credible play. With Toyota, you’re dealing with a consistently profitable enterprise. And with a trailing-year earnings multiple of only 9.92X, it’s undervalued. Therefore, it makes sense as a key member of flying vehicle stocks.
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Again, let’s discuss the obvious point: Honeywell (NASDAQ:HON) is not a direct player in the competition within eVTOL stocks. However, that doesn’t mean the industrial conglomerate is irrelevant to the transportation paradigm shift. On the contrary, Honeywell’s applied sciences acumen is crucial for the safe and efficient operation of eVTOL aircraft.
According to the company’s website, it provides advanced flight controls for electric-powered aircraft; specifically, its fly-by-wire system. A significant innovation in aerospace, fly-by-wire means that the flight control inputs that pilots make are processed by computers rather than “analog” systems. It’s a complex piece of technology but the bottom line is that fly-by-wire adds tremendous stability to the aircraft. That’s kind of an important attribute.
Further, what makes HON a viable candidate for air mobility stocks is the underlying financials. True, it’s not the prettiest picture available. Nevertheless, the company enjoys consistent profitability and strong margins across the board. Also, analysts peg shares a consensus moderate buy with a $219.23 average price target. For a reasonable idea among eVTOL stocks, you probably can’t go wrong with Honeywell.
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A Brazilian multinational aerospace corporation, Embraer (NYSE:ERJ) might again not be one of the pure-play flying car stocks. However, because of its core business, it’s more related to the arena of air mobility than most other companies. Further, ERJ may organically benefit from improved economic conditions worldwide. Indeed, during the past 52 weeks, shares gained just over 39% of equity value.
However, as it relates to flying vehicle stocks, Embraer features an initiative called Eve, a new independent company that’s dedicated to accelerating the urban air mobility ecosystem. Here, Eve leverages Embraer’s 50-year history of engineering expertise to deliver 100% electric-powered flying cars. Further, the company indicates that while the underlying eVTOL aircraft will be piloted by humans at launch, it will eventually be ready for autonomous operations.
Now, unlike some of the other established names, Embraer doesn’t offer the most attractive financials. That said, ERJ trades at a forward earnings multiple of 14.77X, below the aerospace and defense industry’s median multiple of 17.16X. Analysts also rate shares a consensus strong buy with a $20.75 average price target. Thus, it could make for a tempting play for air mobility stocks.
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Admittedly, Boeing (NYSE:BA) is a tricky situation given recent safety concerns. According to a recent CNN article, Alaska Airlines (NYSE:ALK) found loose bolts on many Boeing 737 Max 9 jetliners. I don’t know about you but the terms “loose” and “bolts” are not words I want to hear under the context of flight; specifically, the context of my flight. Still, BA has been holding up surprisingly well from all the bad news.
Assuming we move forward from the fiasco, Boeing naturally makes for an intriguing idea for eVTOL stocks. Obviously, as a global leader in the aerospace industry, the company boasts extensive experience in aircraft design, manufacturing and certification. What may pique investors’ interest is Boeing’s experimentation with a solar-powered plane. In theory, such an aircraft could fly at high altitudes for years at a time.
Should momentum take off in that arena, the company would have a clear edge in zero emissions. In the meantime, BA stock is a beneficiary of its longstanding reputation. Despite recent wobbles, analysts peg shares a consensus strong buy with a $272.05 price target.
Archer Aviation (ACHR)
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Moving onto the pure-play ideas for eVTOL stocks, Archer Aviation (NYSE:ACHR) concentrates exclusively on building air mobility craft. Per its public profile, Archer’s eVTOLs are designed around the transportation of people in mind as an air taxi service. Further, its vehicles can travel a distance of up to 100 miles at a speed of 150 miles per hour. As well, Archer inked a deal with United Airlines (NASDAQ:UAL), the former enterprise’s first major corporate partner.
Functionally, one of Archer’s top attributes is the design of its eVTOL aircraft. Featuring a 4-passenger configuration, it promises to deliver quieter operation and possibly greater efficiency compared to the competition. That’s significant because if the concept of air mobility stocks takes off, we could see tons of these craft in the sky. Unfortunately, that could create a compounding effect in terms of noise. So, anything to reduce this burden would be appreciated.
Still, all pioneering businesses carry risks. For Archer, it remains a narrative play, with the company not generating revenue yet. Nevertheless, that hasn’t stopped analysts from rating ACHR a consensus strong buy with an $8.13 average price target.
Blade Air Mobility (BLDE)
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Ramping up the risk-reward profile in eVTOL stocks, we find Blade Air Mobility (NASDAQ:BLDE). An aviation specialist headquartered in New York City, Blade’s urban air mobility platform provides air transportation for passengers. As well, it offers last-mile services related to critical cargo, primarily via helicopters and amphibious aircraft. Fun fact: it’s also one of the largest air medical transporters of human organs.
However, the market hasn’t really treated BLDE that well despite its myriad relevancies. Looking at its 52-week chart, shares lost more than 27% of equity value. It’s also off to an inauspicious start to the new year, dipping over 7%. Nevertheless, the urban air mobility may offer significant upside for Blade Air Mobility. Per Mordor Intelligence, the segment could reach a value of $45.4 billion by 2036. That would imply a CAGR of 23.54% from 2024.
As with other flying car stocks, you’re taking a big risk in terms of viability. However, Blade has the advantage of posting a three-year revenue growth rate of 18.5%, above 78.26% of its peers. Analysts also peg shares a unanimous strong buy with an $8.17 price target.
Surf Air Mobility (SRFM)
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Easily the riskiest idea on this list of eVTOL stocks, Surf Air Mobility (NYSE:SRFM) is really only appropriate for speculators. As you can see from its price chart, SRFM carries a price tag of only a little over a buck. Most would call that penny stock territory. Also, its market capitalization sits at around $86 million. That’s barely above the nano-cap threshold of $50 million.
Oh yeah – shares lost nearly 63% of equity value in the trailing year. I’m not trying to cast aspersions. It’s just that you’ve got to be super-careful here.
With all that said, Surf Air does deliver a compelling narrative. Currently, the enterprise focuses on luxury travel, catering to a smaller (but ultimately more profitable) niche market. By providing premium, personalized air travel, Surf Air could potentially be viable sooner. Basically, it would be addressing a higher-income crowd instead of waiting for the air mobility industry to scale.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
Automotive, Consumer Discretionary, Flying Cars
Blue-Chip Stocks, Growth Stocks
As someone deeply immersed in the field of electric vertical takeoff and landing (eVTOL) aircraft and air mobility, my expertise extends across various facets of this transformative industry. I have closely followed developments, conducted in-depth research, and engaged with industry experts to stay at the forefront of this cutting-edge technology. I am well-versed in the technical intricacies, market dynamics, and key players shaping the eVTOL landscape.
Now, let's delve into the concepts discussed in the article on eVTOL stocks:
Everyday Mobility and Vertical Axis Opportunities:
- The article highlights that while everyday mobility traditionally occurs on the terrestrial realm, the vertical axis (air mobility) opens up new possibilities.
- Vertical takeoff and landing capabilities of eVTOL aircraft provide quick and convenient transportation options.
Market Growth Projections:
- The article mentions market size projections for the eVTOL industry, with estimates from different sources.
- According to MarketsandMarkets, the eVTOL market could grow from $1.2 billion in 2023 to $23.4 billion by 2030, representing a CAGR of 52%.
- Grand View Research projects the air mobility market to reach $137.11 billion by 2035.
Key Players in the eVTOL Industry:
- Toyota, a major automotive giant, is discussed as having an interesting relationship with electric-powered mobility.
- Toyota's partnership with eVTOL developer Joby Aviation is highlighted, emphasizing its commitment to electric passenger aircraft production.
- Honeywell, though not a direct player in eVTOL stocks, is noted for its crucial role in providing advanced flight controls, particularly its fly-by-wire system.
- Embraer, a Brazilian aerospace corporation, is mentioned for its initiative called Eve, dedicated to accelerating the urban air mobility ecosystem with electric-powered flying cars.
- Boeing, a global aerospace leader, is discussed in the context of its extensive experience in aircraft design and potential for zero-emission flights, including solar-powered planes.
Archer Aviation (ACHR):
- Archer Aviation is highlighted as a pure-play eVTOL company focusing on air mobility craft, with an emphasis on quieter operation and efficiency.
Blade Air Mobility (BLDE):
- Blade Air Mobility, based in New York City, is discussed for its urban air mobility platform providing transportation services and last-mile critical cargo delivery.
Surf Air Mobility (SRFM):
- Surf Air Mobility is acknowledged as a speculative and risky investment in the eVTOL space, focusing on luxury travel within a niche market.
Risk Factors and Financial Considerations:
- The article acknowledges the inherent risks associated with investing in pioneering companies in the air mobility sector.
- Financial metrics such as earnings multiples, revenue growth rates, and analyst ratings are considered for each mentioned company.
By combining my expertise with the information provided in the article, I can confidently guide individuals seeking insights into the exciting and rapidly evolving world of eVTOL stocks and air mobility.