Eve Still Looks Like a Big Long-Term Winner
Eve Air Mobility (EVEX) continues to make commendable progress towards becoming a huge, profitable eVTOL maker, as it has obtained orders for 2,700 eVTOLs and has started actively testing its aircraft.
Moreover,the company has recruited multiple, promising partners and, as I pointed out in a previous column , the fact that its majority owner, Embraer (EMBJ), is a major seller of airplanes should help it make major deals in many countries, while eVTOLs, for multiple reasons, are likely to be very successful.
With Eve, which is looking to sell rather than operate eVTOLs, changing hands at a very low market capitalization of $833 million relative to its huge opportunities, the shares look like an intriguing choice for patient, long-term growth investors.
Orders and Testing
In July, Eve noted in a press release that it had about 2,700 pre-orders for its eVTOLs. According to the company, that represented the largest backlog in the sector. Impressively, two major helicopter operators –Brazil’s Revo and Japan’s AirX – had recently made “binding” pre-orders for 50 eVTOLs each from Eve.
Those binding pre-orders from companies with aviation expertise provide some validation of the firm’s aircraft and consequently bode well for Eve’s outlook.
In addition to the pre-orders from Revo and AirX, Eve in July announced that Switzerland-based “aviation company” Moov had “signed a letter of intent” to acquire as many as 30 of Eve’s eVTOLs.
In the same press release, Eve reported that its “engineering prototype has completed dozens of successful test flights.” It noted that it has finished its evaluation of the aircraft’s ability to hover and fly at low speeds. Further, it stated that it expected the tests to progress to additional areas during the summer.
As of the end of June, the company had conducted 59 successful test flights.
Partnerships
Last month, Eve and Thailand-based RV Connex signed a letter of intent to attempt to promote eVTOLs in the Asian country.
In March, Eve disclosed that it was allying with two aviation firms –Alt Air and Skyports –to lay the framework for eVTOL service in Australia. And in addition to looking to buy Eve’s aircraft, Moov will help Eve evaluate opportunities for eVTOLs in the Cape Verde islands off of Africa.
The Bottom Line on Eve
The company looks well-positioned to become one of the world’s leading manufacturers and sellers of eVTOls. If this scenario unfolds, EVEX stock will soar many times.
But the company’s eVTOLs are not slated to get off the ground in terms of commercial operations until 2028, and the Street is currently unwilling to pay much for most pre-revenue firms. Consequently, it will likely be some time before Eve’s shares really take off.
