We recently published a list of 7 Best Small-Cap Drone Stocks to Buy Now. In this article, we are going to take a look at where Eve Holding, Inc. (NYSE:EVEX) stands against other best small-cap drone stocks to buy now.
Drones are the strategic weapon in modern warfare and we have experienced the use of high-end drone technology in the Iran-Israel and Russia-Ukraine wars. Drones or unmanned aerial vehicles (UAV) were also prominent in the 2020 conflict between Azerbaijan and Armenia.
READ ALSO: 8 Best Military Drone Stocks to Buy According to Analysts.
Drones are not only used in military applications but have become popular in amateur photography, videography, and logistics. Drone technologies continue to improve and emerge, for instance, the U.S. Department of Defense is currently investigating the development of uncrewed vehicles that use AI through its Replicator initiative. Vertical takeoff and landing (VTOL) autonomous aircraft are gaining popularity in the military. VTOL autonomous vehicles provide various features for military purposes including ISR to search and rescue.
According to a report from MarketsAndMarkets, the global drone industry was valued at $30.2 billion in 2024 and is projected to cross $48.5 billion in 2029, growing at a compound annual growth rate (CAGR) of 9.9%. Whereas, the UAV volume is expected to rise from 5.42 million units in 2024 to 7.51 million units in 2029.
Drone stocks remain an attractive investment option for investors as the industry continues to expand. However, not only publicly traded companies present investment opportunities, exchange-traded funds (ETFs) are also a notable option. Two major drone ETFs: SPDR S&P Aerospace & Defense ETF and iShares US Aerospace & Defense ETF returned over 38% and 27% in 2024, outperforming the broader market. Apart from established players in the drone sector, investors have a variety of emerging small-cap stocks to explore.
Our Methodology
We shifted through stocks that were involved in the drone business with a market capitalization between $200 million and $5 billion, as of January 23. We then selected the 7 best small-cap drone stocks based on hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024. The best small-cap drone stocks are ranked in ascending order of their hedge fund holdings.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of an urban skyline with a fleet of eVTOLs flying in formation.
Eve Holding, Inc. (NYSE:EVEX)
Market Capitalization: $1.45 Billion
No. of Hedge Fund Holders: 7
Eve Holding, Inc. (NYSE:EVEX) along with its subsidiaries provides urban air mobility solutions. The company is engaged in the design and production of eVTOLs, including material services, maintenance, technical support, training, ground handling, and data services. Eve also manages the development of urban air traffic management systems.
Eve Holding, Inc. (NYSE:EVEX) has completed the assembly of its full-scale engineering prototype and initiated testing, marking a new development era. The company plans to test the prototype in the first half of 2025. On December 12, 2024, Canaccord Genuity analyst Austin Moeller upgraded the price target to $7 from $6.75 and maintained a Buy rating on EVEX. The analyst remains bullish on EVEX following the company’s improved liquidity, which now sits at $445 million, allowing the company a three-year runway for cash consumption.
Eve Holding, Inc. has a pre-order backlog of almost 2,900 aircraft valued at $14.4 billion, reflecting the strong market demand and potential future revenue. The company has launched ‘Tech Care,’ an integrated service portfolio for maintenance, logistics, and training, improving customer support and operational efficiency. Eve Holding, Inc. (NYSE:EVEX) continues to expand its operations and the rising demand for eVTOLs makes it an attractive investment option.
Overall, EVEX ranks 3rd on our list of best small-cap drone stocks to buy now. While we acknowledge the potential of EVEX to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EVEX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.