Raymond James has reduced its recommendation on Vertical Aerospace Ltd. (NYSE:EVTL) to Underperform from Market Perform, pointing to acute liquidity pressure and intensifying competition within the electric vertical takeoff and landing aircraft market. The stock is trading at $4.40 and is down 17% year-to-date. The firm noted a current ratio of 0.55, a metric the analyst described as indicative of constrained near-term liquidity.
Analyst Savanthi Syth detailed the firms cash runway view, saying Verticals liquidity is expected to extend through mid-June under the assumption of normal flight testing expenses and excluding about $92 million remaining in the companys at-the-market offering. That outlook is consistent with data from InvestingPro showing the companys levered free cash flow was negative $97.86 million over the past twelve months, underscoring the rapid pace of cash consumption.
Raymond James also highlighted competitive risks to Verticals engineering base. The analyst pointed to Archer Aviations announcement of a U.K. engineering hub in Bristol as increasing the possibility Vertical could lose technical staff. As an example, the firm cited Dr. Limhi Somervilles planned move to Archer in early 2026 as illustrative of potential talent migration between competitors.
The broker further argued that Verticals market capitalization, now at $433.49 million, sits below the $500 million threshold that can dissuade institutional investors from taking positions in higher-risk equities. InvestingPro assigns Vertical a "Weak" financial health score. Despite these headwinds, InvestingPros Fair Value analysis indicates the shares could be undervalued at current levels; investors can obtain more detail through a Pro Research Report on EVTL, one of the platforms 1,400-plus research reports.
On corporate partnerships, Vertical stated in early November that it is working to secure an industrial partner. Management has suggested such a partner would likely make an investment intended to reassure the market about the companys prospects and financial footing.
Operationally and commercially, Vertical has advanced several initiatives. The company has announced plans to operate electric air travel routes serving Manhattan in collaboration with Bristow Group and Skyports Infrastructure, aiming to reduce travel times on city approaches such as between John F. Kennedy International Airport and Manhattan using its Valo aircraft.
Internationally, Vertical signed a strategic Memorandum of Understanding with AHQ Group and the Saudi National Industrial Development Centre to foster Advanced Air Mobility in Saudi Arabia, with an emphasis on industrial development and commercial deployment.
Public demonstrations remain part of Verticals outreach. The company plans to display its Valo aircraft at a public event in Miami Beach scheduled for February 24-25 at the Bass Museum. The Valo is presented as a commercial electric aircraft designed for roughly 100-mile trips at cruising speeds near 150 mph.
Analyst coverage is mixed. While Raymond James reduced its view to Underperform, William Blair has recently initiated coverage of Vertical with an Outperform rating, signaling divergent opinions among sell-side analysts about the companys strategic positioning within the urban air mobility market.
Takeaway: Raymond James downgrade centers on a narrow liquidity runway and talent and competitive threats, even as the company pursues commercial routes, partnerships, and public demonstrations. The companys sub-$500 million market capitalization and negative levered free cash flow are central to the brokers cautionary stance.