Lilium NV: Early-Bird Investors Could Do Exceptionally Well With This Overlooked EV Play

Why Wall Street Expects LILM Stock to Double

Lilium NV (NASDAQ:LILM) is an interesting option for investors looking at electric vehicle (EV) stocks. Most people aren’t familiar with Lilium stock, but that has more to do with the fact that it only went public in late September (through a merger that gave it $367.0 million in net cash).

LILM stock isn’t your typical EV play. Instead of disrupting the automotive industry, Lilium NV is looking to take a big chunk out of the aircraft and airline industry. Lilium is an electric-vertical-takeoff-and-landing (eVTOL) company.

Not only is Lilium stock relatively new, but so is the company’s technology. Most people don’t even know eVTOL aircraft exist.

There aren’t any eVTOL aircraft certified yet, but the day of seeing jets take off vertically and hover over congested traffic is closer than you might think. Some companies are targeting availability as early as the end of 2022.

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Wall Street predicts that eVTOL flights will become a green and inexpensive alternative to traditional flights. The jets are expected to revolutionize urban, suburban and regional mobility.

Currently, eVTOL revenues are, for argument’s sake, zero. Lilium predicts that the total addressable market for the eVTOL passenger and shipping industry will be about $1.5 to $3.0 trillion by 2040. (Source: “Investor Presentation — March 2021,” Lilium NV, last accessed October 13, 2021.)

Lilium is expected to be at the forefront of the eVTOL revolution.

About Lilium NV

What separates Lilium NV from its competitors?

The company’s jet technology is based on its “Ducted Electric Vectored Thrust” (DEVT) system, which reduces noise, increases flight path options, and improves redundancy and payload capacity. (Source: Ibid.)

Lilium NV has assembled a team of more than 400 engineers with significant experience in the electric aviation industry.

These engineers have developed and delivered some of the most successful and complex aircraft in history, including the “Airbus A 320” (the most successful aircraft ever), the “Airbus A380” (the largest passenger airliner), the “Eurofighter Typhoon” (the most advanced fighter jet), and the “Harriet VTOL” (the first vertical-takeoff-and-landing fighter jet).

Lilium NV has inked exclusive partnerships for an eVTOL network of 14 vertiports in Florida (where it expects to first launch), with 10 additional sites to roll out in Europe. Germany is the company’s first European target.

The first project will be a seven-seat eVTOL jet projected to offer the highest capacity and lowest noise level on the market. To start, Lilium NV is targeting shorter regional flights. It will eventually roll out a longer-range 16-seater.

An eVTOL flight from Philadelphia to New York City would take only 30 minutes, saving an hour or more of driving by car and costing just $170.00.

An eVTOL flight from Sacramento to San Francisco is projected to take just 30 minutes and cost $165.00, which more than offsets the hour or more of driving by car.

As the cost of EV batteries falls, the cost of eVTOL flights is expected to fall as well.

It should be easy for Lilium NV to recoup its expenses. Each eVTOL jet is expected to cost about $2.5 million and generate $15,000 per day, or $5.0 million annually. The lifetime profit per jet is projected to be about $10.0 million.

The charging time for each flight is expected to be 20 minutes, which is about how long it takes jet passengers to board.

Forecast

In addition to its initial target market of urban commuters in the U.S. and Europe, Lilium NV’s potential market includes government agencies, cargo transportation, and enterprise mobility.

In Florida, the company will initially deploy about 125 jets, generating approximately $600.0 million annually.

Lilium NV’s proposed German-based network will cover Germany, Luxembourg, Switzerland, and Austria. The initial 190 jets are expected to bring in $900.0 million in revenue each year.

By 2027, Lilium NV hopes to have 1,000 jets in operation, sell 30,000 tickets per year, and average $550.00 in revenue per flight.

The opportunity for the company to expand globally is massive.

Lilium doesn’t expect to start generating any revenue until 2024, but it should scale quickly after that. The company projects revenue of $250.0 million in 2024, ramping up to $3.3 billion by 2026 and $5.9 billion by 2027. (Source: Ibid.)

It’s still early, but disruptive technologies almost always make significant gains in the early days. Once a technology is fully operational, it’s a whole different story.

Chart courtesy of StockCharts.com

Since LILM stock only went public in September, it doesn’t have a long chart history.

As of this writing, Lilium stock is trading at $9.77, but analysts see LILM stock’s price exploding over the next 12 months.

The average 12-month share-price forecast for Lilium NV is $20.50, with a high estimate of $24.00. That points to potential upside of 110% and 145%, respectively. Even the low estimate of $17.00 points to a 75% gain.

Naturally, nothing is guaranteed, but the rollout of eVTOL technology is a given, and it will have a huge impact on the shares of companies with first-mover advantage. Even Wall Street expects Lilium to be at the forefront of that lift-off.

Analyst Take

Lilium NV is an eVTOL company that’s expected to see its revenues explode from zero today to almost $6.0 billion in 2027.

Wall Street doesn’t think investors will have to wait until then to see Lilium stock take off. Over the next year, LILM stock is expected to double in price. Enthusiastic investors could send the stock significantly higher as the company announces further developments.