Multi Phase Flight Testing And Backlog Progress Will Support Future Urban Air Mobility Ecosystem

Catalysts

About Eve Holding

Eve Holding develops electric vertical take off and landing aircraft and related urban air mobility services and software.

What are the underlying business or industry changes driving this perspective?

• Progress through a structured multi phase flight test program, with 28 flights already completed and plans for around 300 flights in 2026, supports the move from prototype to certification compliant aircraft and is aimed at laying the groundwork for future revenue from aircraft sales and services.
• A total preorder backlog of about 2,700 aircraft with an estimated list value of roughly US$13.5b, alongside firm contracts such as Revo and AirX and 14 Eve TechCare agreements, provides visibility on potential demand that could influence future revenue scale once deliveries and aftermarket activity begin.
• Growing engagement with suppliers, completion of key tooling and components for certification conforming prototypes, and a modular industrial plan targeting up to 480 vehicles per year at the Taubaté facility are intended to support volume production and could help spread fixed costs and affect future margins.
• Investment in adjacent offerings such as the Eve TechCare aftermarket suite and the Vector air traffic management solution, with 21 customers already signed for Vector, creates additional software and services streams that may contribute to revenue diversification and earnings resilience over time.
• A liquidity position of about US$641 million, including undrawn credit lines, and guidance for 2026 cash consumption of US$225 million to US$275 million provide funding for intensified R&D, certification and plant build out, which is aimed at supporting the transition from current net losses to a future period where revenue and earnings can be driven by a full eVTOL ecosystem.

Assumptions

How have these above catalysts been quantified?

• Eve Holding currently has no revenue. Analysts are forecasting revenue to reach $599.2 million by March 2029.
• Analysts are not forecasting that Eve Holding will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Eve Holding's profit margin will increase from 0.0% to the average US Aerospace & Defense industry of 8.5% in 3 years.
• If Eve Holding's profit margin were to converge on the industry average, you could expect earnings to reach $50.9 million (and earnings per share of $0.12) by about March 2029, up from -$224.3 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 75.1x on those 2029 earnings, up from -3.9x today. This future PE is greater than the current PE for the US Aerospace & Defense industry at 43.6x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.02%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The urban air mobility market is still emerging, and Eve is relying heavily on non binding letters of intent for about 2,700 aircraft and US$13.5b of potential backlog. Slower regulatory acceptance of eVTOL operations in key cities or weaker long term passenger adoption could translate into fewer firm orders and lower realized revenue versus expectations, which would affect earnings power.
• Eve is a pre operational company with 2025 operations consuming around US$196 million of cash when adjusted for deferred payments and guidance for 2026 cash use of US$225 million to US$275 million. If certification takes longer or requires more extensive testing than planned, higher ongoing R&D and supplier costs could pressure liquidity and delay any path toward positive net margins and earnings.
• The long term industrial plan depends on suppliers for critical systems and a modular plant that targets up to 480 vehicles per year at the Taubaté site. Any supply chain delays, design rework during the Critical Design Review, or slower than expected ramp in manufacturing capability could limit near term delivery capacity and constrain revenue growth and operating leverage.
• The business model assumes meaningful contribution from software and services such as the Eve TechCare aftermarket suite, with up to US$1.6b of potential revenue, and the Vector air traffic management solution with 21 customers. If operators or regulators are slower to adopt these tools at scale, the mix could skew more toward lower margin hardware, which would weigh on overall net margins and earnings.
• Eve ended 2025 with US$641 million in liquidity, expects higher cash consumption as development intensifies and also anticipates ongoing share count growth. If future funding needs arise before the business generates material cash flows, additional debt or equity financing could dilute existing shareholders and raise the hurdle for per share earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $7.11 for Eve Holding based on their expectations of its future earnings growth, profit margins and other risk factors.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $5.28.
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $599.2 million, earnings will come to $50.9 million, and it would be trading on a PE ratio of 75.1x, assuming you use a discount rate of 8.0%.
• Given the current share price of $2.5, the analyst price target of $7.11 is 64.8% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.