EVEX Plunges 10.3% as Q2 Losses Widen and Market Doubts Mount

Summary
• Eve Holding (EVEX) reports $64.7M Q2 loss, up from $36.4M in 2Q24
• Cash reserves at $242.7M, but liquidity concerns persist
• Stock drops to 5.76, a 10.3% intraday decline from 6.32 open

The selloff in Eve Holding’s shares reflects investor unease over widening losses and operational challenges. With the stock trading at its lowest since March 2025, the market is scrutinizing the company’s ability to execute its eVTOL and urban air mobility (UAM) vision. The Q2 earnings report, marked by a 76% year-over-year increase in R&D expenses and a 48% jump in SG&A costs, has amplified skepticism about EVEX’s path to profitability.

Q2 Losses and R&D Costs Drive Sharp Selloff
Eve Holding’s Q2 2025 earnings report revealed a net loss of $64.7 million, a 76% increase from $36.4 million in the same period last year. The primary driver was a 25% surge in R&D expenses to $45.7 million, attributed to prototype development, engineering collaboration with Embraer, and testing infrastructure. SG&A costs also rose 52% to $8.2 million, reflecting higher payroll and pre-operating expenses for its Brazil production site. The $9.5 million non-cash derivative charge further pressured the bottom line. With cash consumption at $56.9 million in Q2, investors are questioning whether the company’s $375.5 million liquidity buffer will suffice to fund operations through 2026.

Aerospace & Defense Sector Volatile as EVEX Trails Peers
The Aerospace & Defense sector remains fragmented, with EVEX underperforming key peers. Vertical Aerospace (EVTL) fell 9.6%, while Embraer (ERJ) edged up 0.4%. The sector’s mixed performance reflects broader uncertainty about eVTOL commercialization timelines and regulatory hurdles. EVEX’s 10.3% drop highlights its vulnerability as a pre-revenue player with no near-term revenue visibility, contrasting with more established defense contractors. The 52-week range of $2.33–$7.70 underscores EVEX’s speculative nature, with the stock now trading near its 200-day moving average of $4.57.

Options and ETF Strategy: Capitalizing on Volatility with EVEX20260116P5 and EVEX20260116P7.5
• 200-day average: $4.57 (below current price)
• RSI: 42.77 (oversold)
• MACD: 0.084 (bullish divergence)
• Bollinger Bands: 6.24–7.46 (price near lower band)

EVEX’s technicals suggest a potential rebound from oversold levels, but the bearish near-term trend persists. The 5% downside scenario to $5.71 (current price of $6.01) favors put options. Two top options from the chain:

• EVEX20260116P5
- Type: Put
- Strike: $5.00
- Expiry: 2026-01-16
- IV: 65.09% (moderate)
- Leverage: 11.93%
- Delta: -0.25 (moderate sensitivity)
- Theta: -0.0020 (slow decay)
- Gamma: 0.1228 (high sensitivity to price swings)
- Turnover: $60,000
- Payoff at $5.71: $0.71/share (14.2% return on strike price).
- Why it stands out: High gamma and moderate IV make this put ideal for a 5% downside scenario, with liquidity to ensure execution.

• EVEX20260116P7.5
- Type: Put
- Strike: $7.50
- Expiry: 2026-01-16
- IV: 79.43% (elevated)
- Leverage: 2.71%
- Delta: -0.55 (high sensitivity)
- Theta: -0.0024 (slow decay)
- Gamma: 0.1246 (high sensitivity)
- Turnover: $1,100
- Payoff at $5.71: $1.79/share (23.9% return on strike price).
- Why it stands out: Despite lower liquidity, the high delta and gamma position this as a high-reward play if the selloff accelerates. The elevated IV reflects market pessimism, offering potential for outsized gains if the stock breaks below $6.00.

Action: Aggressive bears should prioritize EVEX20260116P5 for a measured downside bet, while EVEX20260116P7.5 suits high-risk, high-reward scenarios. Monitor the $5.76 intraday low as a critical support level.

Backtest Eve Holding Stock Performance
The backtest of EVEX's performance after an intraday plunge of -10% shows favorable short-to-medium-term gains. The 3-Day win rate is 49.75%, the 10-Day win rate is 48.02%, and the 30-Day win rate is 51.49%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest period was 6.15%, which occurred on day 57, suggesting that while there is some volatility, EVEX can recover and even exceed its pre-plunge levels.

EVEX at Critical Juncture: Watch $5.76 Support and $6.47 Resistance
The selloff in EVEX reflects a market grappling with the company’s operational challenges and uncertain revenue timeline. While the stock’s 10.3% drop has pushed it toward oversold territory, the bearish technical bias remains intact. Investors should closely monitor the $5.76 intraday low as a near-term support level and the $6.47 intraday high as a potential resistance. The sector leader, Vertical Aerospace (EVTL), also fell 9.6%, signaling broader skepticism about eVTOL commercialization. For EVEX, liquidity constraints and widening losses are the key risks. Action: Position for a test of $5.76 support or a rebound above $6.47 to trigger a short-term bounce.