Joby Aviation Makes Push Into Defense With $500 Million Acquisition. What It Means for JOBY Stock.

As sentiments around artificial intelligence continue to be strong, defense is quietly and steadily becoming a key focus area for the investing community. This is corroborated by the performance of the shares of the iShares US Aerospace & Defense ETF (ITA), the largest ETF in terms of AUM covering the defense sector. Up 17% this year, the ETF has outperformed the S&P 500's ($SPX) rise of about 13%.

Thus, when Joby Aviation (JOBY), known primarily as an air-taxi company, announced it would acquire Ohio-based defense technology company Resonant Sciences for $500 million, it further strengthened the attractiveness of defense as an investment opportunity.

Yet, JOBY stock investors seemed less enthused about the development, as evidenced by the 4.4% drop in the share price immediately following the news.

About Joby Aviation

Founded in 2009, Joby is one of the leading companies developing electric vertical takeoff and landing (eVTOL) aircraft for commercial air-taxi services. Joby's core product is its S4 electric aircraft, an eVTOL designed to carry one pilot and four passengers at speeds of about 200 miles/hour, and with a targeted range of around 100 miles on a single charge.

Valued at a market cap of $8.7 billion, JOBY stock is down 38% on a year-to-date (YTD) basis.

So, what will Resonant bring to Joby? More importantly, why did the stock react the way it did after the announcement of the acquisition? Let's try to answer.

Bring Renewed Focus to the Air-Taxi Business

Shares of Joby have been trading for five years now, and the stock is down more than 15% since then. The lack of commercial operations of the air-taxi unit is the key reason for this. Flights are still in testing mode, although the company expects the first planes to take flight in September 2026. Notably, the company is in the fifth and final stage of FAA certification, and the sooner they receive it, the better it will be for the dwindling stock.

Investors could not be blamed for overlooking the company's strengths, of which there are some genuine ones. Joby operates as a vertically integrated aerospace company that develops substantial portions of electric motors, propulsion, software, flight-control systems, and battery systems, among others. Then, Joby has entrenched partnerships with two giants: Toyota (TM) and Uber (UBER).

While Toyota had already committed a $500 million investment in the company about two years ago, the latest partnership will see Joby make use of Toyota's advanced manufacturing capabilities to bolster its air taxis. Whereas the partnership with Uber will allow riders to be able to book Joby's all-electric air taxi directly through the Uber app, the service is expected to go live for users in Dubai in 2026.

Now, with the acquisition of Resonant, Joby can fully steer its focus towards this core business rather than its defense division. It must be acknowledged that Joby has been working with the U.S. government for a decade. In fact, it was even before the current eVTOL commercialization push, including an expanded U.S. Air Force Agility Prime contract in 2022 that brought the potential value of its government relationship to more than $75 million, and a further extension in 2023 took it to $131 million. Now, Resonant, which will act as the company's dedicated defense business unit, will bring its expertise in radio frequency (RF) sensing, signal processing, low-observability stealth technology, and electronic countermeasures to the fold.

Moreover, Resonant is EBITDA-positive, and on a trailing 12-month basis, it reported revenue of about $100 million, indicating a 40% YoY growth rate.

Still Unprofitable

Amid all this, the reality is that Joby continues to be unprofitable, with the losses coming in wider than expected in Q2 2026.

Revenues for the quarter came in at $38.6 million, of which $36.2 million came from the Blade business, an aviation company whose passenger business it acquired last year. Thus, this contributed to a massive growth in revenues from the past year, when it was just $15,000. Moreover, losses narrowed to $0.25 per share from $0.41 per share in the year-ago period. Yet, it was still above the consensus estimate of a loss of $0.23 per share.

Net cash outflow from operating activities for the six months ended June 30, 2026, was at $579.3 million, compared to an inflow of $56.2 million in the prior year. Overall, the company closed the quarter with a cash balance of $629.9 million, which was much higher than its short-term debt levels of under $10 million.

And since Joby is yet to report profits, traditional valuation metrics are not applicable yet. Yet, the applicable ones, they are flashing overvalued signs. Its forward EV/S and P/S at 59.51 and 72.04 are both considerably above the sector medians of 2.30 and 1.92, respectively.

Analyst Opinion of JOBY Stock

Overall, analysts have assigned a consensus rating of “Hold” for JOBY stock. The mean target price of $10.50 indicates an upside potential of about 29% from current levels. Out of 11 analysts covering the stock, one has a “Strong Buy” rating, one has a “Moderate Buy” rating, six have a “Hold” rating, and three have a “Strong Sell” rating.