Joby Aviation's Q3 2025 Earnings and Valuation Reassessment: Is the Stock Undervalued Ahead of FAA Certification and eVTOL Market Leadership?

The electric vertical takeoff and landing (eVTOL) sector is at a pivotal inflection point, with Joby Aviation (NYSE: JOBY) emerging as a key contender in the race to commercialize urban air mobility. As the company prepares to release its Q3 2025 financial results on November 5, 2025, investors are scrutinizing whether its valuation reflects its progress toward FAA certification and its leadership in a rapidly expanding market. With the stock stabilizing at $15.75 as of October 23, 2025, and a projected 38% annual growth rate in the North American air taxi market, according to Traders Union, the question remains: Is Joby undervalued ahead of its critical milestones?

Financial Performance and Valuation: A Tale of Two Realities

Joby's Q2 2025 financial report revealed a robust balance sheet, with $991 million in cash, cash equivalents, and marketable securities, according to its Q2 2025 report. This liquidity, bolstered by a $250 million strategic investment from Toyota, provides a buffer against the company's current revenue challenges. However, the stark revision of 2025 revenue projections-from an initial $721 million to a mere $4.1 million, according to a Traders Union article-underscores the operational hurdles of scaling a nascent industry.

Despite these headwinds, Joby's valuation appears anchored to its long-term potential. At a market cap of approximately $12.5 billion (as of October 2025), the stock trades at a discount to its projected market share in the eVTOL sector. Analysts argue that the company's 70% completion of FAA certification, far ahead of rival Archer Aviation's reported 15%, positions it to capture early-mover advantages. Yet, the absence of near-term revenue streams raises questions about whether the market is overestimating the speed of commercialization.

FAA Certification: A Double-Edged Sword

Joby's progress in FAA certification is both its greatest strength and its most significant risk. The company has completed 70% of stage four of the certification process, with TIA flight testing slated to begin within 12 months, according to Joby's record certification progress press release. This timeline, however, has been pushed back from an initial 2024 target, as noted in a Morgan Stanley note, reflecting the complexities of navigating regulatory scrutiny. While the FAA's rigorous standards are a barrier for all eVTOL firms, Joby's lead in certification could allow it to launch commercial operations as early as late 2026, according to Joby's record certification progress press release.

The delay, however, has not gone unnoticed by investors. A Morgan Stanley note observed that Joby's "meaningful progress" in certification has been offset by missed milestones, which coincided with an 11% stock surge in October 2025-a mix of optimism and skepticism. The FAA's extended timeline also highlights the sector's vulnerability to regulatory unpredictability, a risk that could dampen investor enthusiasm if certification further lags.

Market Leadership and Competitive Dynamics

Joby's competitive edge lies in its partnerships and technological differentiation. Its collaboration with Toyota, cited by MarketChameleon, and agreements with ride-hailing platforms position it to integrate eVTOLs into existing mobility networks. Meanwhile, its aircraft design-optimized for noise reduction and energy efficiency-aligns with urban regulatory demands.

Yet, the eVTOL market is crowded. Archer Aviation, Wisk, and Lilium are all vying for dominance, with Archer's 15% certification progress and Lilium's recent funding rounds creating a competitive overhang. Joby's leadership is further tested by infrastructure challenges: airports, charging networks, and air traffic management systems must evolve to support eVTOL operations.

Risks and the Road Ahead

The primary risks to Joby's valuation are twofold. First, the FAA's certification timeline remains a wildcard. Delays could erode investor confidence and allow competitors to close the gap. Second, the eVTOL market's scalability hinges on infrastructure development and public acceptance-factors beyond Joby's control.

That said, the company's financial runway and strategic partnerships mitigate some of these risks. With $991 million in cash (per its Q2 2025 report), Joby can afford to navigate a multiyear certification process. Its recent stock stabilization and the projected $675 million eVTOL market by 2028 suggest that the market is beginning to price in long-term potential, even if short-term revenue remains elusive.

Conclusion: A Calculated Bet on the Future

Joby Aviation's Q3 2025 earnings report will offer critical insights into its financial health and regulatory progress. While the stock's current valuation reflects a cautious outlook, the company's 70% FAA certification lead and strategic positioning in a high-growth sector argue for a long-term investment thesis. For risk-tolerant investors, the stock appears undervalued relative to its potential to dominate the eVTOL market. However, the path to profitability remains fraught with regulatory and operational challenges-a reality that demands careful monitoring of the November 5 webcast and subsequent updates.