How will the divestiture of the passenger business to Joby Aviation affect Strata Critical Medical’s financial outlook and valuation?

The divestiture eliminates Blade’s highest‑growth, higher‑‑margin segment – the on‑demand passenger‑flight business – and replaces it with a pure‑play medical‑technology portfolio. From a fundamentals standpoint the Company will lose a substantive revenue stream (Blade reported ≈ $120 mm of passenger‑related top‑line in FY‑24) and the associated cost base, which means near‑term earnings are likely to compress and the “combined‑entity” cash‑flow outlook that investors had priced in will be cut by 15‑20 %. However, the transaction also removes a capital‑intensive operation (fleet financing, aircraft maintenance, regulation‑heavy air‑mobility costs) and leaves Strata with a higher‑gross‑margin, recurring‑revenue medical franchise that, historically, trades at 3‑4× EV/EBITDA versus the 8‑10× range Blade once commanded. The upside is the “clean‑up” of a low‑growth, aviation‑risk business and the potential upside of up‑front consideration paid in Joby stock plus a contingent $35 mm earn‑out and up‑to $10 mm in indemnity holdbacks – together worth roughly $45‑$50 mm in added equity value if the performance targets are met.

On the market side, SRTA opened on a modest volume, with the new ticker trading below its immediate post‑closing price as investors re‑price the stripped‑down balance sheet. The technical picture is still fragile – the stock is near the 20‑day moving average, a short‑term support level that could see extra downside if earnings guidance comes in weaker than consensus. Conversely, if Strata can demonstrate that its medical pipelines and contract backlog are resilient (e.g., > $150 mm of guaranteed revenue over the next 12 months) and the Joby earn‑out targets are met, the equity upside is capped at roughly a 12‑15 % bounce from today’s lows, reflecting a re‑valuation from a hybrid aviation‑medical growth story to a pure‑medical earnings‑core story.

Trading takeaways

• Short‑term: Expect modest selling pressure and a potential 5‑8 % pull‑back as the market digests the loss of the passenger‑business earnings. Tight‑hand stop‑losses around ‑8 % from the entry level can limit exposure to volatility.
  
• Medium‑term: If Strata’s medical earnings come in line with guidance and the $35 mm earn‑out is secured, the stock could recapture 10‑12 % of the sell‑off, presenting a buying opportunity on the dip. Monitor the Company’s revised EBITDA outlook and any guidance on the indemnity hold‑back – a cash component would add a near‑term liquidity tailwind and support a higher EV/EBITDA multiple.
  

Overall, the divestiture depresses short‑run cash‑flow expectations and pushes the valuation toward a lower‑multiple, medical‑focused peer set, but the contingent earn‑out and stripped‑down cost structure give the stock a modest upside if operational execution in the medical segment holds up.