By Archer Aviation (ACHR) and Joby Aviation (JOBY) stocks have bounced back in the past few weeks as investors have embraced a risk-on sentiment in the market. JOBY jumped to a high of $6.25 on Tuesday, up by 37% above its lowest point this year.
Similarly, Archer Aviation, which is backed by Stellantis, rose to $3.30, also higher than the year-to-date low of $2.82. Other flying car stocks like Lilium, Ehang, and Vertical Aerospace also bounced back.
The rebound this week after the Federal Aviation Administration (FAA) finalized comprehensive pilot training and certification rules for flying taxis. In its statement, the agency said that the rule was the final piece in the puzzle for safely introducing these aircrafts in the near term.
Archer and Joby Aviation have been working through the certification process as they work towards the commercialisation phase.
The two have received most of the certificates they need to start flying their aircraft, with their management expecting final approvals either in 2025 or in 2026. Most recently, Joby Aviation has applied for certifications in other countries like Australia and the United Arab Emirates (UAE).
Joby Aviation stock analysis
JOBY, the biggest company in the EVTOL industry by market cap, will use a different business model compared to other companies.
It will do the manufacturing process and then offer the mobility solutions itself or through partnerships. The core of its offering is its aerial ridesharing service, where customers will be able to book flights using their smartphones.
This model will ensure that the company makes money by selling its aircraft and then earning recurring revenues through the life of the aircraft.
Joby Aviation has made a lot of progress in the past few months as it prepares for commercialisation. The most recent announcement was that it received a $500 million investment from Toyota, one of its core clients. Toyota has invested $894 million in the company so far.
This investment is notable for three reasons. First, Toyota is one of the best manufacturers globally. As such, it will likely have a positive influence in the company’s manufacturing process over time.
Second, the investment has boosted its balance sheet, by bringing its cash and short-term investments to over $1.3 billion today.
Third, there are chances that the partnership will unlock Joby Aviation’s business in Japan, where Toyota has a large presence.
The daily chart shows that Joby Aviation is a good speculative buy for now. It has formed an ascending double-bottom chart pattern, a popular bullish sign whose neckline was at $7.68, its highest point on June 16.
Joby Aviation is also about to form a golden cross as the 50-day and 200-day Exponential Moving Averages (EMA) cross each other. It is also approaching the 61.8% Fibonacci Retracement point.
Therefore, there are odds that the JOBY stock will have more upside, with the initial target being at $7.68, which is about 25% above the current level. A move above that level will point to more gains.
Joby chart by TradingView
Archer Aviation stock analysis
Archer Aviation is another large company in the flying car industry. The company will have two lines of businesses after receiving certificates by the FAA. It will have Archer UAM, where it will operate its aircraft in select cities by letting customers book through an app.
Archer Direct, its other business, will let it sell aircraft to third parties. For example, it has a large deal with United Airlines, which will buy up to $1 billion worth of aircraft. The deal also has an option for another $500 million worth of aircraft. Also, it has a large deal with the US Airforce.
Like Joby Aviation, Archer also raised $400 million from Stellantis a few months ago. Stellantis, the parent company of Jeep and Chrysler, will also help it in the manufacturing process. In this deal, Stellantis will fund its manufacturing, and then receive shares each quarters in return.
Read more: Archer Aviation: risk/reward analysis for this flying car stock
The challenge, therefore, is that the company will continue to dilute its investors as it has done in the past few years. Archer’s outstanding shares have jumped from just 50 million in 2020 to almost 300 million today, and the trend may continue.
The daily chart shows that the ACHR stock price has been in a downtrend, falling from last year’s high of $7.50 to a low of $3. It has remained below the 50-day and 200-day moving averages.
Archer Aviation stock has also formed what looks like a double-bottom chart pattern. The Relative Strength Index (RSI) has also continued rising, and has moved above the neutral point at 50.
Therefore, there are rising odds that the Archer Aviation shares will bounce back in the near term. However, for this to happen, it needs to remain above the key support at $3. A drop below that point will lead to more losses in the near term.
Therefore, I believe that Joby Aviation is a better investment for now based on its technicals and fundamentals.
Archer Aviation chart by TradingView
Read more: Analysts are upbeat about Archer Aviation stock: should you?
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