Vertical Aerospace Ltd. (EVTL) is an aerospace and technology company that engages in designing, manufacturing, selling, and servicing electric aircraft. It recently completed its business combination and began trading on December 16, merging with a special purpose acquisition company (SPAC), Broadstone Acquisition Corp., raising $300 million to fund operations.

The stock has lost 18.5% over the past six months to close yesterday’s trading session at $8.09. In addition, it is currently trading 56.1% below its 52-week high of $18.44, which it hit on December 22, 2021.

The company is expected to wait for an extended period for aircraft certification before it ramps up production and revenues. So, EVTL’s near-term prospects look bleak.

Recent Developments

On March 29, 2022, EVTL announced that Avolon, the world’s second-largest aircraft lessor, exceeded its whole 500-unit pre-order of Vertical’s VX4 electric aircraft within nine months.

Moreover, on February 16, EVTL mentioned that Avolon would partner with AirAsia, Asia’s leading low-cost airline, to create a transformational ride-sharing platform in Southeast Asia, including a non-binding memorandum of understanding to lease a minimum of 100 VX4s.

Profitability is the Key Concern

EVTL needs to wait for a long time to become a profitable business. It may lose its sustainability at any moment unless it succeeds on the certification front and becomes profitable by accelerating revenues. 

POWR Ratings Reflect Bleak Prospects

EVTL has an overall rating of D, which equates to Sell in our POWR Ratings system. The POWR Ratings are calculated by accounting for 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. EVTL has an F grade for Value and Quality.

EVTL is ranked #64 out of 75 stocks in the C-rated Air/Defense Services industry. Click here to access EVTL’s ratings for Growth, Stability, Sentiment, and Momentum.

Bottom Line

EVTL could keep losing in the near term as certification remains a headwind. So, it is best avoided now.

How Does Vertical Aerospace (EVTL) Stack Up Against its Peers?

While EVTL has an overall POWR Rating of D, you might want to consider investing in the following Air/Defense Services stocks with an A (Strong Buy) or B (Buy) rating: Moog Inc. (MOG.A), Ducommun Incorporated (DCO), and Kaman Corporation (KAMN).

EVTL shares were trading at $8.01 per share on Tuesday afternoon, down $0.08 (-0.99%). Year-to-date, EVTL has gained 19.02%, versus a -6.49% rise in the benchmark S&P 500 index during the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...

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