Although penny stocks are known for their high volatility, some in this category are supported by strong fundamentals that could drive significant future growth.
One such stock is American aviation company Blade Air Mobility (NASDAQ: BLDE), which may be an overlooked opportunity for investors.
The company’s business model, providing transportation for passenger travelers over short distances, could see more growth, especially with the increasing need for efficient urban mobility.
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Blade operates two segments: Passenger and Medical. The Passenger segment offers short-distance (helicopter and seaplane travel under 100 miles) and jet services across the U.S., Canada, and Europe.
At the end of the last trading session, BLDE was valued at $3.75, ending the day up 4.75%. These short-term gains are crucial in turning things around, considering the equity has had a rough start to 2025, down almost 12% year to date. Nevertheless, BLDE’s share price has been green over the past year, gaining over 11%.
BLDE’s growth potential
With BLDE recovering after years of prolonged losses, the company exhibits potential through several catalysts, such as strong revenue growth.
In the third quarter of 2024, Blade posted $74.9 million in revenue, a 4.8% increase from the previous quarter. Despite the growth, the company reported a net loss of $1.95 million, a drop from the $267,000 profit in Q3 2023. Earnings per share (EPS) came in at a $0.025 loss, down from a $0.004 profit last year.
Interestingly, EPS outperformed analyst expectations by 38%, and Blade’s projected 7.9% annual revenue growth over the next three years outpaces the 7.6% industry average. While profitability remains challenging, the revenue momentum suggests resilience, a positive indicator for investors.
Another potential growth driver is the firm’s expansion into new markets and Electric Vertical Aircraft (EVAs). Notably, with 84% of its revenue coming from the U.S., Blade has room to grow beyond New York, Los Angeles, and Miami, as seen in its Qatar Airways partnership for Monaco helicopter transit.
At the same time, EVAs could cut flight costs, boost profitability, and make fares more accessible.
Blade’s organ transplant segment is another key growth driver. Indeed, this segment has potential, given that Blade operates one of the largest dedicated air transporters of human organs for transplant in the U.S.
Wall Street bullish on BLDE stock
On the other hand, a Wall Street analyst over at TipRanks is projecting that Blade Air Mobility could be in for a strong rally over the next 12 months, setting a price target of $6, representing a 60% upside from its last trading price.
The stock also has a bullish nod from banking giant JPMorgan (NYSE: JPM), which has an ‘Overweight’ rating on BLDE.
Meanwhile, the stock received strong backing after it emerged that Cathie Wood, CEO and investment manager of Ark Invest, had bought a stake in the company. However, it is not a top holding among institutional investors.
On the flip side, investor interest in the stock might be impacted by notable insider sales in recent months. These trades, which involved CFO William Heyburn and CEO Robert Wiesenthal, could raise eyebrows.
However, these transactions were executed under a Rule 10b5-1 trading plan, suggesting pre-planned sales rather than a lack of confidence in the company’s direction.
Featured image via Shutterstock
