Cantor downgrades air taxi company Joby after sharp stock rally

Cantor Fitzgerald downgraded Joby Aviation to Neutral from Overweight, citing valuation concerns after a substantial share price increase of nearly 60% in the past three months and almost 90% over the past year. While acknowledging Joby's strong position in the eVTOL sector and key partnerships, the firm flagged a high cash burn rate, potential delays in FAA certification until at least the second half of 2026, and investor uncertainty regarding unit economics as reasons for the downgrade.

Analysis

Cantor Fitzgerald has downgraded Joby Aviation (JOBY) to Neutral from Overweight, primarily citing valuation concerns after the stock's significant appreciation, with a nearly 60% rise in the past three months and an almost 90% increase over the past year, substantially outperforming the S&P 500's 12% gain. Despite acknowledging Joby's strong positioning within the electric vertical takeoff and landing (eVTOL) sector, supported by strategic partnerships with Toyota, Delta Air Lines, and the U.S. Department of Defense, the firm points to several headwinds. A key concern is Joby's high cash burn rate, with projected spending between $500 million and $540 million this year, against approximately $1.3 billion in total liquidity at the end of the first quarter. Furthermore, Cantor Fitzgerald anticipates potential delays in U.S. FAA Type Certification, forecasting it will not be achieved until at least the second half of 2026, which could impact Joby's timeline for launching passenger services in Dubai, currently slated for the first half of 2026 after pilot testing in mid-2025. The downgrade also reflects lingering investor uncertainty regarding the unit economics of Joby's air taxi service, including pricing and deployment costs. Following the announcement, Joby's shares were trading down 3% in premarket.

Key Decisions for Investors

• Given the recent substantial share price rally and expressed valuation concerns by Cantor Fitzgerald, prospective investors should approach Joby Aviation with caution, as current levels may not represent an attractive entry point.
• Existing investors should closely monitor Joby's cash burn rate relative to its liquidity runway and track progress on FAA Type Certification, as these are critical catalysts and potential risk factors highlighted in the downgrade.
• Investors who have benefited from Joby's significant stock outperformance over the past year might consider re-evaluating their position size in light of the identified uncertainties regarding certification timelines and unit economics, potentially taking partial profits.