Joby (NYSE:JOBY) appears to have most of the ingredients necessary to enable JOBY stock to (pardon the pun) eventually take off.

Specifically, the air-taxi company has proven technology, a service that should generate strong demand, a highly accomplished CEO, impressive backers and a fairly reasonable valuation.

When it comes to JOBY stock, I only have, for the time being, one major worry. That is, I believe that JOBY could have trouble getting the cooperation of some government entities.  But I do think that the  company will be able to eventually overcome that hurdle.

Proven Technology and Likely Strong Demand

Unlike some start-ups, there’s little doubt that Joby has technology that actually works. That’s because, according to reliable reports, the company “has been flying prototype” electric vertical takeoff and landing aircraft, or eVTOLs, since 2017, as seeking Alpha reported on sept. 1.. What’s more, earlier this month, it tested its eVTOLs  in partnership with NASA.

And I have little doubt that there will be very strong demand for Joby’s service. Anyone who has ever sat for long periods of time in very slow traffic that shows no sign of easing knows how upsetting that can be and the extent to which it can ruin one’s plans.

And it turns out that traffic is also extremely expensive. (In hindsight, I shouldn’t be surprised by that, since, as the old saying goes, “time is money). Another InvestorPlace contributor, Josh Enomoto, recently wrote that, “a study by the Centre for Economics and Business Research and INRIX,…estimates that ‘Americans over a 17-year period to 2030 will waste $2.8 trillion due to traffic congestion should gridlock trends persist.’”

Amazingly, in my view, Joby is looking to make its initial fares “competitive” with those of Uber (NYSE:UBER), according to Seeking Alpha. At that price, who wouldn’t choose to zip to their destinations in a few minutes “as the crow flies,” rather than waiting in traffic lights and traffic with an Uber? What’s more, Joby’s CEO, JoeBen Bevirt, suggested that the company could  lower the price even further down the road (or down the sky).

Impressive Backers and a Highly Accomplished CEO

Somewhat validating Joby and its technology, the company has a long list of top-notch investors, including LinkedIn’s co-founder Reid Hoffman, JetBlue (NASDAQ:JBLU), Toyota (NYSE:TM), BlackRock (NYSE:BLK), Fidelity, Uber, and Zynga’s (NASDAQ:ZNGA) co-founder, Mark Pincus.

Bevirt, Joby’s CEO, is an engineer who has a Master’s degree in Mechanical Engineering from Stanford. According to Money, he received “the Haueter Award for outstanding technical contribution. His inventions in the field of VTOL aircraft development earned him this distinction.”

The inventor of the VTOL aircraft, the CEO “currently holds 30 United States patents” and ” has launched four companies in the past decade that have become successful,” Money added.

Assessing Potential Threats

Enomoto, the other InvestorPlace columnist, wrote that “Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT), among several other companies have their eyes set on the potential eVTOL revolution.”

But my research  suggests that Joby, which tested its aircraft with NASA from Sept 1 until Sept. 10, is far ahead of those large companies, which don’t seem to be running many test flights.

Joby has many potential competitors, including Blade (NASDAQ:BLDE), which is already flying helicopters and seaplanes in several parts of the U.S. and plans to at some point fly  eVTOL  planes.

But , given Joby’s ample funding and first-mover advantage, I’m not too worried about it being badly hurt by the competition. Additionally, Morgan Stanley has estimated that eVTOLs will generate $1 trillion of revenue within 20 years from now, so it appears that the market will be large enough to support at least a few winning companies.

On the other hand, as I mentioned earlier, I am somewhat worried about the possibility of some governments opposing air taxis. After all, Uber, Lyft (NASDAQ:LYFT), and old-fashioned taxis still generate many jobs, especially in U.S. cities.

But autonomous vehicles are probably going to take away those jobs anyway, sooner or later. And Joby’s investors are some pretty heavy hitters who probably have a great deal of influence with governments. And finally, the U.S. federal government, at least, already  seems on board with eVTOLs, as NASA has already worked with Joby, and the FAA has said that it expects to green light eVTOLs, “by 2023,” Bloomberg reported.

Valuation and the Bottom Line on JOBY Stock

Lucid’s market capitalization is $42 billion, while Quantumscape (NYSE:QS), a pre-revenue electric-vehicle battery maker,  has a market capitalization of $9.8 billion. Yet those companies, unlike Joby, do not have any real first-mover advantage.

But the current market capitalization of JOBY stock is around $6 billion.   Given Joby’s many positive attributes, I view that valuation as fairly low. Consequently,  I urge long-term, risk-tolerant investors to take a small position in the shares.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, Plug Power, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.