Key Takeaways:
- Joby Aviation down 48% YTD, Archer down 37% as commercialization nears
- Short interest elevated at 10% for Joby and 14.28% for Archer
- Both companies report earnings Aug. 5 and Aug. 7 with cash burn in focus
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Joby and Archer Aviation stocks plunge 48% and 37% on dilution fears
Joby Aviation and Archer Aviation lost nearly $10 billion in combined market value this year as dilution fears overshadowed progress toward commercial operations.
"Both companies are trading as if commercialization will slip, but the underlying partnerships and federal approvals tell a different story," said a Canaccord Genuity analyst who maintains an $11.50 price target on Joby.
Joby shares have fallen 48% year to date and 60% over the past 12 months, while Archer has declined 37% and 57%, respectively. The declines have persisted even as both companies finalize commercial partnerships — Joby with Virgin Atlantic, Delta Air Lines and Uber, and Archer with United Airlines for up to 200 aircraft, Ethiopian Airlines and Southwest.
The selloff has pushed short interest to 10% of Joby's float and 14.28% of Archer's, reflecting bets that the companies will need to raise additional capital before achieving meaningful revenue. Both report quarterly results next month — Joby on Aug. 5 and Archer on Aug. 7 — with investors focused on cash burn rates and any updates to commercialization timelines.
The two companies have raised billions through equity sales to fund development of their electric vertical takeoff and landing aircraft. Joby's outstanding shares have swelled to more than 560 million from 300 million in 2021, while Archer's have surged to 623 million from 110 million over the same period. Both hold substantial cash reserves — Joby with $2.4 billion and Archer with $1.8 billion — but analysts expect further dilution before the companies turn profitable.
The eVTOL industry is projected to grow at a 12.3% compound annual rate through 2035, reaching a $5 billion market size, according to Markets and Markets. Joby's S4 aircraft has a 241-kilometer range and travels at speeds of 241 to 322 kilometers per hour, while Archer's Midnight offers a 160-kilometer range. Toyota holds 128 million shares of Joby, making it the largest shareholder, while Stellantis backs Archer.
Analyst price targets suggest significant upside from current levels. The consensus target for Archer stands at $11.80, more than double its current price of about $4.75. Joby's consensus is similarly elevated, with Needham and Oppenheimer setting $18 targets and Morgan Stanley at $13.
This article is for informational purposes only and does not constitute investment advice.
