The flying car industry is taking off to new heights. That backdrop forms this list of the most undervalued flying car stocks to buy. As the technology behind flying cars continues to evolve, the potential of this industry is becoming increasingly apparent.
Flying cars, also known as eVTOLs (electric vertical take-off and landing vehicles), offer a great solution to the challenges of traditional ground-based transportation. These vehicles use advanced aerial mobility to provide a more environmentally friendly, and often faster, way to navigate around the world, with diverse applications ranging from use in warehouses to search and rescue missions.
Governments are looking forward to the emergence of flying cars, as the increasing look for sustainable transportation alternatives, and the desire to alleviate traffic congestion in densely populated regions.
For all these reasons and more, these companies are poised for substantial growth ahead. However, not all the companies are created equal. So, here are three of the most undervalued flying car stocks for investors to consider.
Archer Aviation (ACHR)
I believe that Archer Aviation (NYSE:ACHR) is a potentially undervalued play in the flying car industry. It has secured deals with the U.S. Air Force that could be worth as much as $142 million. Additionally, the firm’s joint efforts with Boeing (NYSE:BA) on developing autonomous aircraft and the FAA’s green light for test flights of its Midnight model mean there’s a clear roadmap for the company’s success.
The perception of ACHR as undervalued is supported by substantial institutional investments. Notably, Cathie Wood’s ARK Invest has upped its holdings in the firm, with the ETFs acquiring over 230,000 shares collectively.
More specifically, ACHR remains undervalued due to its market cap of $1.3 billion at the time of writing. This strikes a balance, to me, between not too big or small, leaving significant capital appreciation potential on the table. For context, it’s around a third of Joby Aviation’s (NYSE:JOBY) market cap of $3.39 billion.
With all flying car stocks in their earliest stages, it stands to reason that a company with a smaller market cap could have more potential, all else being equal.
Airbus (EADSY)
Airbus (OTCMKTS:EADSY) is delving into the urban air mobility market with its eVTOL projects, CityAirbus and Vahana. The CityAirbus is particularly notable for its all-electric, four-seat design.
Due to the problems with Boeing, Airbus remains the only other major aircraft manufacturer in the world used by airlines. With airlines increasingly pulling away from Boeing due to safety concerns, I expect more investor inflows to move toward EADSY as time goes on.
However, in its own right, the CityAirbus NextGen could be a strong contender in the industry. It features a fixed-wing design, eight propellers, a 39-foot wingspan, and a 50-mile range with a cruising speed of 75 mph. The new aerial vehicle is intended for urban and suburban use and will initially be piloted, with automated flight capabilities planned in the future.
I also believe EADSY is an undervalued pick due to investors primarily focusing on big names like JOBY while neglecting one of the most established companies in the aerospace sector.
EHang (EH)
EHang (NASDAQ:EH), a Chinese leader in the flying car sector, has developed the EH216, an air taxi capable of reaching speeds up to 80 miles per hour. The company has completed thousands of successful test flights at multiple sites across China.
EHang’s investment appeal is further bolstered by its recent accomplishment of receiving a type certificate from the Civil Aviation Administration of China (CAAC), and I feel there’s a strong reason to feel bullish on EH’s future prospects.
As InvestorPlace previously reported, EH stock received a production certificate from the CAAC for its EH216-S eVTOL, a first-of-its-kind global achievement. Following this announcement, EHang’s stock surged, rising 4.8% on the day and 11.3% year-to-date.
China continues to show a preference for its domestic firms to help make them competitive overseas and bolster internal consumption. For this reason, I think EH is in a great position in the Chinese market. It could surpass firms in terms of capital appreciation that focus on Western markets such as JOBY.
These factors make EH stock one of those undervalued flying car stocks to buy.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
