Joby Aviation stock in bear market before earnings: buy the dip?

Joby Aviation stock price is stuck in a technical bear market after falling by ~53% from its highest point in August last year.

It was trading at $9.72 as investors wait for the upcoming earnings, which will provide more information on the path towards commercialisation. 

Why Job Aviation stock price has crashed 

In theory, this should be a good year for Joby Aviation stock as the company approaches its commercialisation, which is expected to start later this year or in early 2027.

It has also expanded its manufacturing capacity by acquiring a third location.

Joby Aviation also made an important acquisition as it moves towards commercialisation.

It acquired Blade, a buyout that gave it access to ready customers and landing spots.

Blade carried over 40,000 passengers in the third quarter and has already inked a partnership with Uber and L3Harris.

In reality, however, the stock has crashed and shed billions of dollars in value as the market capitalisation dropped from over $17 billion to $9.58 billion today.

This retreat accelerated after the company announced a new capital raise in January. If issued $600 million of 0.75% convertible senior notes due in 2032.

Also, the company will sell 52.9 million shares at $11.35, followed by a separate delta offering by Morgan Stanley.

As a company with no revenue, Joby Aviation has been highly dilutive in the past few years, with its common shares jumping to over 900 million from 604 million in 2021.

The most recent results showed that Joby Aviation made over $22 million, mostly from Blade. Its operating expenses soared to over $204 million.

As a result, the net loss jumped to over $400 million from the previous $143 million. Its nine-month loss jumped to over $808 million.

Unfortunately, this loss-making will likely remain even when the company starts its commercialisation.

Its business strategy includes selling its jets to other companies and operating its air taxi business.

Wall Street analysts tracking the company have a weak outlook on the company, a sign that they expect it to face bumps ahead.

Goldman Sachs and Weiss Ratings have a sell rating, while Canaccord Genuity has a hold rating.

Joby stock price technical analysis

The three-day timeframe chart shows that the Joby Aviation stock has plunged in the past few months.

This retreat started after peaking at $20.95 in August last year to the current $9.73.

It formed a descending triangle pattern whose lower side is at $12. This triangle often leads to more downside. It has now moved below the 61.8% Fibonacci Retracement level.

The stock has moved below all moving averages, a sign that bears are in control. It has also formed an island reversal pattern, which happens after a major gap.

Therefore, the stock will likely rebound and retest the key resistance at $12.

A break-and-retest pattern is one of the most common continuation signs in technical analysis.

As such, it may rebound to $12 and then resume the downward trend.