Joby Aviation (JOBY) is back in focus after completing its first aircraft built to full FAA standards, starting powered testing, securing about $1.2b in public offerings, and planning to double U.S. production capacity.

Against that backdrop, Joby’s recent news on FAA standard aircraft, powered testing, fresh capital and expanded U.S. manufacturing has come alongside a 30.4% year to date share price decline, while its 1 year total shareholder return is 25.8% and 3 year total shareholder return is very large, signalling long term momentum despite recent pullbacks.

If Joby’s air taxi progress has caught your attention, it could be worth widening your watchlist to other eVTOL and automation names through our 33 robotics and automation stocks.

With the stock down 30.4% year to date, yet still showing a 25.8% 1-year and very large 3-year total return, plus a last close below the average analyst price target, is Joby undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 18% Undervalued

Joby Aviation’s most followed narrative pegs fair value at about $12.14 a share, compared with the recent $9.99 close, which puts that story in the spotlight.

The company is investing heavily ahead of broad commercial adoption, including scaling manufacturing with Toyota, building out facilities in Marina and Dayton, and preparing global operations. This could keep cash use high and delay earnings leverage if real air taxi demand or pricing power falls short of expectations, which in turn could pressure future net margins.

Curious what kind of revenue ramp, margin shift and valuation multiple need to line up to support that fair value? The narrative leans on aggressive growth assumptions and a premium future earnings multiple that most airlines do not see. The full breakdown shows exactly how those ingredients combine to reach the current fair value estimate.

Result: Fair Value of $12.14 (UNDERVALUED)

However, there is still a chance that faster progress on certification and commercial routes, as well as growing defense and autonomy revenue, could challenge this undervalued story.

Another Angle on Valuation: P/B Tells a Tougher Story

The popular fair value story suggests Joby looks around 18% undervalued at $9.99 versus $12.14, but the P/B ratio paints a very different picture. At 10.8x book value versus 2.2x for peers and 1.7x for the wider North American Airlines group, the stock sits at a steep premium that raises clear valuation risk if expectations cool.

With no fair ratio available as a guide for where that multiple could settle over time, you are left asking whether this premium is a sensible price for early stage potential or a gap that could narrow if sentiment softens.

Next Steps

If this mix of optimism and concern has you on the fence, now is a good time to review the numbers yourself and weigh both sides with our 1 key reward and 2 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.