In the final weeks of 2024, so-called electric vertical takeoff and landing (eVTOL) companies such as Archer Aviation Inc. NYSE: ACHR dominates the headlines. Archer and some of its opponents are racing to bring to market an affordable, convenient lineup of air mobility products. Whichever company—or companies—can successfully meet regulatory requirements and launch eVTOL aircraft at significant scale is likely to reap the benefits of an anticipated new market around air taxis.
However These eVTOL firms There are a number of which have attracted the attention of investors Other aerospace and defense companies Which are worth noting going into 2025. These firms may have less glamorous projects in the works or — in the case of rival eVTOL companies — may not have seen share price appreciation in recent months. The fact that these companies are under the radar can make them all the more attractive to investors who are trying to avoid jumping on the bandwagon with their investments.
The aerospace and defense industry is expected to grow significantly in the coming quarters, thanks in large part to ongoing geopolitical tensions. $2.4 trillion in global defense spending in 2023. Growing interest in commercial airline travel after the Covid-related downturn in business and as inflation has stabilized is another factor boosting companies in the industry.
Duomoon: Stellar Q3 performance and signs of undervaluation
Ducommun Inc. NYSE: DCO manufactures electronic and structural systems used in various aerospace and defense applications as well as other industries. for The latest quarterRevenue topped $200 million for the first time, led by Docomoun’s military and space business. The firm topped analyst expectations for EPS and EBITDA for the quarter.
A number of major contracts with defense firms have fueled Docomun’s recent growth RTX Corp. NYSE: RTXFormerly Raytheon. Ducommun signed several contracts with RTX in 2024, totaling $50 million.
Despite this strong performance, Ducommun’s shares are up just under 22% as of December 13, 2024, meaning the firm lags slightly behind the S&P 500 in its growth momentum. Ducommun has a P/S ratio of 1.2 and a forward P/E ratio of 19.4, which is competitive for the industry, suggesting it may have room to continue growing and, perhaps, eventually, the broader market. can surpass
Eve Holding: The eVTOL firm is quietly working towards testing
A lesser known eVTOL company, Eve Holding Inc. NYSE: EVEXArcher Aviation is more than one-third the size by market capitalization as of December 13, 2024. While the Eve doesn’t have the backing of a major automotive company like its rival Archer, it does Secure funding Large loan from Brazil’s National Development Bank as well as Citibank to support R&D efforts. These additions brought the company’s total cash, cash equivalents and financial investments to approximately $280 million as of the end of the third quarter, helping to improve its liquidity.
Perhaps more importantly, Eve is getting closer to being able to bring a vehicle to market. The company completed an engineering prototype in July, and since then, Eve has run the prototype through an extensive series of tests in hopes of further progress toward regulatory approval.
Eve is currently rated a buy by three Wall Street analysts, according to reviews. As of Dec. 13, it has potential upside of about 27%—although, it’s worth noting that much of that has come from the decline in the company’s share price, which has sent shares down nearly 32% over the past year. . Investors taking an optimistic view of Eve’s prospects amid the changing regulatory landscape in 2025 may find that the company presents an attractive value proposition and a buying opportunity before then.
EHang: Ambitious production plans for a major player in China
Chinese Unmanned Aerial Vehicle (UAV) firm EHANG HOLDINGS LIMITED Nasdaq: E.H Provides logistics, products and services related to eVTOLs. It is a major competitor in China, where it has received the first type certificate, production certificate and standard airworthiness certificate for unmanned passenger-carrying eVTOL aircraft issued by the government.
For EHang, the most recent quarter was a busy one in progress completing the mechanical and regulatory hurdles necessary to bring a vehicle to market. For example, the company made significant progress on a solid-state battery in early 2024 that increased flight endurance by more than 90%.
EHang’s order list continues to grow, primarily as businesses in China take advantage of its custom system and tools. As of the end of the quarter, the company said it had a backlog of about 1,000 EH216-S products—the EH216-S is the company’s 2-person eVTOL multicopter.
Despite a 14% decline in the year to Dec. 6, EHang is still rated a consensus buy, according to three Wall Street analysts. Like EVEX above, EH shares have fallen in price over the past year, albeit by a more modest percentage than EVEX. This is part of the reason why EH shares have potential upside of over 61%. However, all will depend on the company’s ability to meet its production model targets.
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