In terms of green transportation, everyone talks about electric cars, but not many people appear to be thinking of other possibilities. Flying car, or electric vertical takeoff and landing (eVTOL), aviation companies are some of the fastest-growing stocks in the transportation industry, and it could help move a large number of people around cities in the coming decades. Analysts and market enthusiasts predict flying cars could revolutionize urban mobility and create a multi-billion-dollar market. With enough investment and consumer interest, this nascent market could become a force to be reckoned with, similar to how the electric vehicle (EV) market has grown in the past decade.
Despite the field being relatively small, having to pick which flying car stocks are worth investing in can be tough for a laymen investor. Wall Street ratings may serve as a good indication in this case. Below are three flying car stocks to buy.
EHang (EH)
China-based EHang (NASDAQ:EH) designs and manufactures autonomous aerial vehicles (AAVs) for tourism, logistics and emergency response applications. Unlike many AAV manufacturers, EHang has delivered several products and generated sales. Toward the end of last year, EHang received airworthiness certification from China’s aviation safety authority, making it the first company in the world to receive such a certification. The safety certification came after a number of compliance and safety assessments. Moreover, EHang’s third quarter results saw the AAV manufacturer deliver 13 AAVs, a notable increase over the 4 AAVs delivered during the same period in 2022.
Despite the economic overhang from the pandemic and an ongoing property debt crisis, EHang has still been able to grow its business and gain traction in several major Chinese cities. In February, the company signed an agreement with Guangzhou city authorities to initially focus on airspace management, infrastructure development and policy support. This agreement will allow EHang to help develop an eVTOL industry in the city.
The eVTOL firm’s Q4 earnings report came out in Mid-March and was a pleasant surprise for investors. Not only did revenue reach record levels but the company’s net loss narrowed, which is what shareholders would like to see in a start-up firm. In particular, EHang generated RMB117.4 million, which represented an increase of 165% from RMB44.3 million in 2022. EHang also delivered 23 AAVs in Q4, which brought the 2023 total to 52 AAVs sold and delivered to customers, which is 31 more than in 2022.
In the beginning of 2024, EHang was underperforming the market but with such good earnings news, the eVTOL firm’s shares have risen nearly 20% on a year-to-date basis.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) has continued to build the eVTOL space here in the United States. In particular, this California-based company aims to create a scalable eVTOL aircraft that can carry passengers and cargo over short distances.
The company has made significant strides in preparing cities across the United States for flying taxi infrastructure. In mid-January, Joby announced a partnership with eVTOL company Atlantic to electrify current aviation infrastructure in southern California and New York. This would eventually pave the way for Joby to kickstart the release of its long-awaited air taxi service. Furthermore, Joby signed a contract with Dubai’s Road and Transport Authority to give the start-up exclusive rights to launch and run an air taxi service in the UAE’s flagship city for six years. The air taxi service should launch by the end of next year. In other words, Joby expects the UAE to be its debut launch market.
While Joby is definitely still pre-revenue, these various partnerships give us a glimpse into the company’s long-term potential as a major player in the nascent space. Joby’s share price is down more than 25% in 2024, but the company’s stock could rebound as its flagship vehicle receives more certifications and as new markets express interest in eVTOLs.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) is another U.S-based developer of vertical takeoff and landing aircraft for use in urban air mobility. The startup has been relying on partnerships to build up revenue and growth potential. In late January, Archer announced a signed agreement with NASA to collaborate on “mission-critical” eVTOL technologies for space applications. Archer will also be developing battery systems with NASA to make eVTOL in space a reality.
However, the company’s inability to increase revenue and close the gap on losses has led to some market turbulence. Archer’s Q4 earnings saw the eVTOL firm’s loss widen more than Wall Street analysts had anticipated. Still, Wall Street is still rating ACHR shares a “Strong Buy,” and that’s based on a survey of 7 analysts.
Recent news the startup plans to make an eVTOL network in the UAE could raise hopes of increased, future earnings. In direct competition with Joby Aviation, Archer expects to operate its vehicles in Abu Dhabi and Dubai. The latter is an interesting claim, given Joby maintains it has exclusive rights to operate in Dubai. This development will be important to watch as both startups launch within the country.
On the date of publication, Tyrik Torres 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.com Publishing Guidelines.
