Joby Aviation's Stock Decline Underscores Dilution Risks Amid Unproven Business Model

What happened

Joby Aviation's stock has dropped 50% from its highs, leading to speculative articles questioning if it's time to buy. A Motley Fool piece highlights Joby's hope for FAA certification this year and plans to raise up to $1 billion due to ongoing cash burn. However, the DeepValue master report reveals this is not new: Joby remains pre-revenue with a $9.6B market cap, burning over $500M annually and recently completing a $1.2B capital raise in January 2026. Critical risks include further equity dilution, potential certification slippage beyond 2026, and unvalidated economics from the Dubai launch slated for this year. Thus, the narrative aligns with the report's WAIT stance, emphasizing that the stock's decline reflects persistent fundamental weaknesses rather than a buying opportunity.

Implication

The planned $1B capital raise, following recent large offerings, signals ongoing dependency on external funding, likely diluting shareholders further without immediate revenue upside. FAA certification hopes for 2026 are optimistic given regulatory uncertainties highlighted in filings, which could delay commercial launch and extend cash burn. Without proven unit economics from early markets like Dubai, the current valuation embeds unrealistic assumptions about growth and profitability. Market sentiment has shifted negatively, with analysts increasingly skeptical, reflecting fragile investor confidence. Therefore, maintaining a wait stance until the stock reaches ~$8.00 or demonstrates concrete milestones like certification and strong Dubai utilization is the prudent approach to mitigate downside risk.

Thesis delta

No material shift in the investment thesis occurs; the article echoes the DeepValue report's existing concerns about cash burn and dilution. The WAIT rating and $8.00 attractive entry point remain valid, as Joby's fundamentals show no improvement in revenue generation or cost control. Investors should only reconsider if certification is achieved on time or Dubai operations prove profitable, neither of which is assured.