Archer Aviation (ACHR), a pioneer in the emerging flying taxi industry, is creating anticipation and excitement among investors, helping to drive the stock up over 90% in the past month. Its innovative drone-like electric vertical takeoff and landing aircraft (eVTOL) are ushering in a revolution in urban travel. This shift in transportation is expected to rise into a massive $9 trillion market by 2050, with Archer’s first-mover status making it a potential heavy hitter in this industry’s early stage.
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Despite its pre-revenue status and a potentially long wait for positive cash flow, Archer’s promising position as a frontrunner in the eVTOL market is backed by a $6 billion order book and a $65 million Georgia-based production facility. Additionally, significant partnerships make it a tempting prospect for patient investors with a long-term outlook and an appetite for high-risk and potential high-reward.
Archer Is Making Significant Progress
Archer has been making significant progress toward bringing its electric vertical takeoff and landing aircraft (eVTOL) to market. Its flagship aircraft, Midnight, has successfully demonstrated its capabilities in a transition flight, showing its speed, versatility, and precision in landing. This highlights the company’s potential for offering a quieter, less polluting alternative to conventional helicopters, particularly in urban environments.
The company is undergoing certification, a crucial step for commercial flight operations. The FAA’s type certification process is currently in Phase 3, with a strong emphasis on hastening the progression to Phase 4, the final stage necessary to obtain a Type Certification. Having completed three of the four required steps, Archer anticipates achieving full certification by the end of 2025.
Near-Term Plans and Partnerships
At the moment, Archer is also working towards production certification for mass production of the Midnight. The completion of a manufacturing facility is imminent, which will principally be devoted to the production of piloted, type-design aircraft for testing and early commercial deployment purposes. The intention is to have it operating in full swing, manufacturing up to 650 aircraft per year by 2025.
In preparation for its air taxis, Archer is partnering with key players like Southwest Airlines (LUV) and Signature Aviation, with plans to establish electric air taxi networks and electrify 200 airports across the U.S. In addition, a consortium led by the Abu Dhabi Investment Office (ADIO) has been organized to establish commercial air taxi services in the UAE as soon as the fourth quarter of 2025. Finally, Archer has partnered with a joint venture involving Japan Airlines (JPNRF) and Sumitomo Corporation’s enterprise (SSUMF). This deal includes a proposed order for Midnight aircraft totaling up to $500 million.
Archer’s Recent Financial Results & Outlook
The company recently reported Q3 2024 financial results. Total operating expenses for the quarter were $122.1 million, driving a net loss of $115.3 million or a per-share loss of $0.29.
ACHR’s management has issued guidance for the fourth quarter of 2024, estimating total operating expenses of $95 million to $110 million.
Bottom Line on ACHR
The stock has been highly volatile (beta of 2.8) as it has reacted to swings in investor sentiment over the past few years, managing a slight 1% loss in that time. It trades near the high end of its 52-week price range of $2.82 – $7.02 and shows ongoing positive price momentum as it trades above all major moving averages.
Recent bullish news includes Needham analyst Chris Pierce initiating coverage of Archer with a Buy rating and $11 price target for shares of ACHR. In his research note, he points out that industry momentum “has left the hangar,” and there is heightened confidence in Archer executing against its $6 billion aircraft order book. While it is a long-term investment story, short-term catalysts (regulatory approvals, first passenger flights) should increase confidence in the longer-term opportunity.
Archer Aviation is rated a Strong Buy overall, based on the recent recommendations of four analysts. The average price target for ACHR stock is $9.38, representing a potential 55.30% upside from current levels.
