Massive News for Joby Aviation Stock Investors
Summary
Parkev analyzes the recent announcement that Joby Aviation will acquire Resonant Sciences for approximately $500 million. This deal, consisting of $450 million in cash and $50 million in stock, is intended to scale Joby's presence in the defense sector, particularly in drone and autonomy technologies. Parkev points out that the market reacted negatively to this news, with Joby's stock price falling, which contrasts sharply with the double-digit gains seen by Archer Aviation following its deal with Boeing. Parkev suggests that because Resonant Sciences demanded mostly cash rather than equity, it may signal a lack of confidence in Joby's long-term valuation compared to the equity-heavy deal Boeing accepted from Archer.
Parkev provides a specific valuation for Joby Aviation using a discounted cash flow model, calculating a fair value of $6.79 per share. Given that the market price is currently around $8.35, Parkev concludes the stock lacks a sufficient margin of safety. Parkev emphasizes that both Joby and Archer are in very early, speculative stages of development, making precise cash flow estimations difficult. Consequently, Parkev maintains a preference for Archer Aviation over Joby, citing the strategic importance of Boeing's partnership as a primary differentiator.
Mentioned Stocks
Reasoning: Parkev reiterated a buy rating for Archer Aviation, stating it is his preferred choice over Joby. Parkev argues that the company has huge upside potential at a reasonable price and views Boeing's recent agreement to take an equity stake in Archer's business segments as a strong vote of confidence in the company's future.
Reasoning: Parkev values the business at $6.79 per share based on a discounted cash flow model. Since the current market price is approximately $8.35, Parkev considers the stock to be fairly valued to slightly overvalued. Parkev also notes that the $500 million acquisition of Resonant Sciences is 90% cash-funded, which he interprets as a potential sign that the seller had less confidence in Joby's equity compared to the recent Archer-Boeing deal.