Key Takeaways
- Joby Aviation has entered into an agreement to purchase defense technology company Resonant Sciences for approximately $500 million ($450M in cash, $50M in equity)
- Shares of JOBY declined 6.5% during premarket hours following the announcement
- The company simultaneously unveiled an at-the-market equity offering program valued at up to $750 million, sparking dilution worries
- Following completion, Resonant will function as Joby’s exclusive defense segment; air taxi services will continue independently
- JPMorgan maintains an Underweight stance on JOBY with a $7 target price, suggesting 32% potential decline
Joby Aviation is taking a significant step into the defense sector. The electric air mobility company revealed on Tuesday its intention to purchase Ohio-headquartered Resonant Sciences in a transaction valued at roughly $500 million.
Shares of JOBY dropped 6.5% in early premarket activity after the disclosure, though they later recovered to close the session approximately 1% higher.
The transaction structure includes $450 million in cash consideration alongside $50 million worth of Joby common shares. Completion is anticipated during the first six months of 2027.
Resonant Sciences specializes in designing, producing, and deploying sophisticated radio-frequency and mission-critical systems for U.S. national defense clients. Following completion, Resonant will operate as Joby’s exclusive defense division.
The merged entity will possess approximately one million square feet of production, integration, and testing facilities throughout the Dayton, Ohio metropolitan area.
Joby’s commercial aerial ridesharing operations will remain distinct, maintaining focus on electric vertical take-off and landing (eVTOL) vehicles for consumer applications.
Concurrently, Joby revealed a new at-the-market stock offering facility valued at up to $750 million. Company leadership isn’t obligated to utilize the entire allocation right away. This mechanism provides the organization with adaptability to distribute additional shares gradually.
However, this flexibility carries implications. The potential for shareholder dilution introduces another consideration for investors as Joby maintains substantial capital expenditures prior to commercial launch.
JPMorgan Acknowledges Milestones, Maintains Negative Stance
JPMorgan analyst James Kirby recognized favorable developments in Joby’s operational progress. Five aircraft are presently operational, with an additional 12 advancing through the manufacturing pipeline, representing a four-unit increase from the prior quarter.
Joby is additionally gearing up to initiate operations through the eVTOL Integration Pilot Program in Texas in the coming month. Passenger service could commence before year-end, preceding complete commercial authorization.
Kirby observed that transporting passengers prior to final certification would represent “an incremental positive for AAM.”
Nevertheless, Kirby expressed reservations regarding the FAA certification timeline. Stage 5 progressed five percentage points throughout the quarter, whereas Stage 4 advanced merely one percentage point. Kirby stated “investors were hoping for more tangible progression.”
Kirby retained his Underweight (Sell) recommendation and $7 valuation target on JOBY, commenting “the current progress is fully baked in.” This target indicates 32% downside from present trading levels.
Analyst Community Shows Mixed Sentiment
Street analysts demonstrate divergent perspectives on the equity. The consensus recommendation stands at Hold, comprising 2 Buys, 2 Holds, and 1 Sell.
The mean valuation target of $13.13 suggests approximately 49% appreciation potential over the coming 12 months.
Joby projects its total addressable market opportunity could ultimately reach $200 billion to $300 billion across multiple decades, although regulatory certification, competitive pressures, and an untested operating model introduce substantial uncertainty moving forward.
The Resonant Sciences transaction remains contingent upon regulatory clearance and is projected to finalize in early 2027.
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