Is Joby Aviation a Millionaire-Maker Stock?

There's rarely a shortage of compelling stocks to buy. A millionaire-making prospect though? That's a different story.

These investments require a revolutionary product or service, enormous demand-driven market growth, savvy leadership that can navigate uncharted waters others don't dare enter, and a little bit of lucky timing. Electric vehicle maker Tesla and e-commerce giant Amazon are two examples. Both have proven very rewarding to investors who saw what each could become before either became the powerhouses they are today.

Only time will tell if a start-up called Joby Aviation (NYSE: JOBY) will drive similar millionaire-making gains. But don't dismiss the prospect. The opportunity certainly seems real enough, and big enough.

What's Joby Aviation?

Never heard of it? Don't worry. Most investors probably haven't. Its relatively small $5 billion market cap just doesn't turn many heads.

Don't let its small size or lack of familiarity deter you, though. This company's got plenty of potential that's on the verge of being unleashed.

Cutting straight to the chase, Joby Aviation makes air taxis. These are simply car-sized aerial vehicles that fly like an ordinary airplane, but take off and land vertically like a helicopter. They're also electrically powered, meaning they're quiet enough to fly anywhere. This flexibility allows them to ferry passengers to and from buildings and small landing sites within densely packed urban zones; you know them better as "big cities."

In fact, the company's already completed a demo flight in New York City as part of plans to launch a service transporting people to and from downtown to JFK Airport. Total trip time? Less than 10 minutes, versus roughly an hour by car.

Don't misread the message: The company's still in its infancy. It's only begun generating revenue this year, and even last quarter's top line of $28,000 is a pittance compared to the $156.7 million it spent on operating costs; most of that was spent on research and development of its aircraft and the expansion of its capacity to build them. (When all is said and done, Joby says its factories will be capable of manufacturing up to 500 aircraft per year.)

Joby stock's worth a look anyway at this time, however, since more serious revenue is on the horizon.

It's just a matter of time

This company's fiscal time frame is still somewhat in question. The FAA gave Joby Aviation permission to operate an air-taxi service back in 2022. Later that same year, Joby partnered with airline Delta Air Lines to develop a home-to-airport service in a handful of select U.S. cities. But there's no commercial operation to speak of yet.

It's coming though, and soon. Just last month, Joby unveiled the prototype aircraft it intends to use as its air taxi, explaining it was only waiting on the FAA to certify it as flight-worthy for this purpose. Once approved, the company can begin operations in Los Angeles and New York City, where the infrastructure needed is nearly ready.

Meanwhile, Joby Aviation has applied to become the United Arab Emirates' first electric air taxi service, and earlier this month it began working on its first vertiport in Dubai.

Clearly, the company expects demand to materialize once all the necessary permissions are in place.

It's not the only believer, either. In addition to its partnership with Delta, in October automobile company Toyota announced it would be investing $500 million in Joby. A month later, we learned the carmaker's interest in air taxes was even keener than a simple equity investment would suggest. As Toyota's chairman Akio Toyoda explained earlier this month, this investment lays the groundwork for an air-taxi collaboration aimed at serving Japan's densely populated cities.

Separately but simultaneously, market research outfit Mordor Intelligence suggests the worldwide air taxi market is poised to grow at an annualized pace of 23% through 2029, jibing with outlooks from Imarc Group and Precedence Research. That's an awful lot of consensus suggesting this market's set to grow to about 10 times bigger than it is now in a decade.

Worth the risk for certain investors

It's not necessarily the right pick for everyone's portfolio. Joby stock's above-average potential upside is paired with above-average risk.

What kind of risk? For starters, although these aircraft are proven, the business itself isn't. Maybe commuters aren't as interested in the option, even if its per-flight pricing is on par with the cost of a trip using a ride-hailing service such as Uber or Lyft. Don't forget how lots of people were also convinced that meal kits like those offered by Blue Apron and Hello Fresh would be wildly marketable to everyone. Now we know they're not.

The point is, not every business idea lives up to the hype.

There's also direct competition like Archer Aviation and Vertical Aerospace, which are both building similar vertical take-off and landing aircraft for the exact same purpose Joby Aviation is. Never mind the fact that Joby continues issuing stock to raise much-needed capital, diluting existing shareholders.

For patient investors who can stomach the risk, though, there may be plenty of room for more than one player in this budding business that's on the verge of potential tenfold growth. As such, Joby Aviation could indeed be a millionaire-maker stock. At the very least, it's a name worth adding to your watch list -- if not yet your portfolio -- to see how the company fares once it begins commercial operations at airports in the near future.

Should you invest $1,000 in Joby Aviation right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Tesla, and Uber Technologies. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.