Contrasting Joby Aviation (NYSE:JOBY) and Southwest Airlines (NYSE:LUV)

Joby Aviation (NYSE:JOBY) and Southwest Airlines (NYSE:LUV) are both large-cap transportation companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Earnings and Valuation

This table compares Joby Aviation and Southwest Airlines”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Joby Aviation	$140,000.00	92,115.83	-$608.03 million	($1.34)	-10.56
Southwest Airlines	$27.55 billion	0.66	$465.00 million	$0.65	53.95

Southwest Airlines has higher revenue and earnings than Joby Aviation. Joby Aviation is trading at a lower price-to-earnings ratio than Southwest Airlines, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Joby Aviation and Southwest Airlines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Joby Aviation	N/A	-77.03%	-55.91%
Southwest Airlines	1.38%	6.39%	1.83%

Volatility & Risk

Joby Aviation has a beta of 2.52, indicating that its share price is 152% more volatile than the S&P 500. Comparatively, Southwest Airlines has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

52.9% of Joby Aviation shares are held by institutional investors. Comparatively, 80.8% of Southwest Airlines shares are held by institutional investors. 28.5% of Joby Aviation shares are held by insiders. Comparatively, 0.8% of Southwest Airlines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Joby Aviation and Southwest Airlines, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Joby Aviation	2	5	1	0	1.88
Southwest Airlines	4	10	4	0	2.00

Joby Aviation presently has a consensus price target of $14.00, indicating a potential downside of 1.02%. Southwest Airlines has a consensus price target of $33.80, indicating a potential downside of 3.61%. Given Joby Aviation’s higher possible upside, analysts clearly believe Joby Aviation is more favorable than Southwest Airlines.

Summary

Southwest Airlines beats Joby Aviation on 10 of the 14 factors compared between the two stocks.

About Joby Aviation

Joby Aviation, Inc., a vertically integrated air mobility company, engages in building an electric vertical takeoff and landing aircraft optimized to deliver air transportation as a service. The company intends to build an aerial ridesharing service, as well as developing an application-based platform that will enable consumers to book rides. Joby Aviation, Inc. was founded in 2009 and is headquartered in Santa Cruz, California.

About Southwest Airlines

Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircraft; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers’ travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest’s EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.