Sign InJoby Aviation (JOBY) Stock Shows Volatility and Overvaluation Amidst Upward Momentum
Summary
Joby Aviation, Inc. (Ticker: JOBY) experienced a significant increase in stock price on June 30, 2023, reaching a closing price of $10.26, but with an overbought RSI and analysts skeptical of its current run-up, the stock is rated as a 'Hold' and investors are advised to monitor developments and financials in the coming weeks.
Technical Analysis
Joby Aviation, Inc. (Ticker: JOBY) closed at $10.26 on June 30, 2023, up by a significant 2.81%. The stock hit a daily low of $9.93 and a high of $11, showing considerable intraday volatility. Its 52-week high and low stand at $11.98 and $3.15 respectively. From a volume standpoint, the company's stock showcased a heavy trading day with a total of 29.78 million shares changing hands as opposed to the average daily volume of 6.78 million shares.
In terms of trend strength, the Relative Strength Indicator (RSI) is currently reading at 75, indicating that the stock is potentially in an overbought stage. Moving averages illustrate a bullish trend for JOBY as the stock is consistently trading above its 50-day and 200-day moving averages. The 50-day moving average stands at $5.60, and the 200-day moving average is at $4.55. The moving average convergence divergence (MACD), another momentum oscillator tool, also shows a positive trend with a reading of 0.81.
Fundamental Analysis
Turning to the fundamentals, the market capitalization of Joby Aviation is a moderate $6.92 billion. JOBY's earning per share (EPS) is a negative $0.52, which is not uncommon for a relatively new company still navigating growing pains. Thus, the price-to-earnings (PE) ratio, typically a key indicator of valuation, is negative standing at -19.73.
Against these financials, JOBY's current share price seems high and could indicate overvaluation. A significant number of shares are in the hands of investors, with 674.67 million outstanding shares. The discounted cash flow (DCF) is $10.51, which is approximately close to the closing price of $10.26 on June 30, 2023, implying that the stock is priced reasonably based on its future cash flows.
Joby Aviation is also operating in a trending industry with significant growth potential. The company recently received permission from the Federal Aviation Administration (FAA) to test its production-line aircraft and also received a fresh $100 million investment from a South Korean telecom giant, SK Telecom. These events, especially the FAA approval, have bolstered investor confidence, resulting in the stock price surge.
Price Prediction
For the next trading day, July 03, 2023, considering the positive sentiment surrounding the company, the price of JOBY stocks could continue to experience upward momentum. However, with the high RSI, a slight pullback or consolidation phase may be noticed due to profit booking.
By analyzing the recent trend, investor sentiment, and the upcoming earnings announcement on August 08, 2023, the stock is predicted to trade higher in the forthcoming week. However, it is worth noting that this prediction does not consider any unforeseen fundamental changes or market volatility. The average analyst target on the stock is $6, indicating skepticism among professional analysts about the stock's current run-up.
Final Evaluation
Considering the significant uptrend, FAA approval, and a large investment, Joby Aviation appears to be a promising company with potential upside. However, its current RSI suggests it may be overbought, and the target price of $6 indicates analysts believe the stock may be overvalued. Hence, they conclude with a rating of 'Hold' for Joby Aviation at this point. The potential investors should keep a close watch on the company's developments and financials in the following weeks leading up to the earnings announcement to assess any possible entry points or positions adjustments. Existing shareholders may want to keep holding the stock and set appropriate stop-loss orders considering the high volatility.
