One of the first things that caught my eye about Joby Aviation in 2021 was seeing the svelte styling of the S4. With its minimalist look and futuristic tilt-rotor design, it screamed to me; this is the future!
On looking into the company further I observed aspects that gave me confidence in their approach. A steady methodical march towards commercialisation for over ten years and a leadership team with a track record of success. Not only that, Morgan Stanley were forecastingĀ¹ the potential market could be worth $1 trillion by 2040 and up to $9 trillion a decade later.
One of my mentors, Warren Buffett, has time and again invested in businesses with long-term intrinsic value and competitive advantages that can be maintainedĀ². I think many of his lessons apply to Joby Aviation. For example its primary route to market is intended to be direct to consumer, in a similar way to Uber, and this may mean it captures a large share of that potentially massive and growing market. It has also focused on vertical integration which should mean competitive advantages through lessons learnt remaining within the business and benefiting it to a greater extent than had those lessons been learnt (or discarded!) via third party operators for example. I also think that its acquisitions of H2Fly and Xwing demonstrate a commitment to continuous development and staying ahead of the pack.
Even a 5% slice of the 2040 market forecast by Morgan Stanley could suggest a market capitalisation for Joby of $95,000,000,000 based on price to book of 1.9, as with Southwest Airlines currently. That seems pretty conservative to me. Even that would equate to a share price of over $124 all things being equal. Personally I suspect that is an underestimate and hope for far more in time.
These are some of the reasons why I first invested in January 2023 and significantly increased my investment this year. In my opinion Joby Aviation is a giant in the making!
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You should carry out your own due diligence and make your own decision as to whether to invest based on aspects such as but not limited to personal research, appropriate independent advice, your circumstances, your appetite for risk etcetera. I am not a professional, just a successful private investor who is motivated by many things including helping my community, having fun while making money and having once been homeless.
