According to one five-star investor, Archer Aviation (ACHR), the eVTOL aircraft company, is trading at a discount to its true potential. While the stock has stayed close to $10 for most of the year, this investor points out that Archer is beginning to unlock opportunities in both commercial air taxi services and defense work. As a result, he believes the company’s current market value of about $6 billion could expand in the years ahead.
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Early Contracts and Anduril Partnership Boost Outlook
Stone Fox Capital, a five-star investor, recently issued a bullish stance on Archer Aviation. He first noted progress in aircraft production. The company now has six aircraft in build and three more in final assembly. At the same time, Archer has secured international launch programs in the United Arab Emirates, Ethiopia, and Indonesia. These contracts include not only the delivery of aircraft but also support services such as training and maintenance. Management has said the initial value of these programs ranges from $18 million to $30 million each. In total, Archer could generate $50 million to $100 million in early revenue even before its main U.S. launch.
The investor also pointed to Archer’s new partnership with defense firm Anduril. Anduril is a private company valued at more than $30 billion after rapid growth in 2024. Archer’s work with Anduril opens a market in defense where hybrid aircraft could be developed. This expansion comes alongside its commercial focus and gives the company another path to growth.
Certification Delays and Cash Burn Remain Risks
Nevertheless, Archer’s progress has not been free of issues. The Midnight aircraft had to change its front propeller design, and some pilot tests focused only on standard takeoff and landing, without vertical lift. This raised questions about whether the aircraft was fully ready for air taxi use. Concerns over transparency also surfaced after a recent test flight used an older version of the aircraft.
Even with these hurdles, Archer maintains a large order book worth about $6 billion and plans to scale production to 650 aircraft each year at its Georgia site. With $1.7 billion in cash, the company has the means to fund operations, although it reported a cash use of about $127 million last quarter.
In closing, Stone Fox Capital highlights that Archer has a path toward a multi-billion-dollar revenue base. He views the stock as attractive for investors who can accept the risks tied to certification delays and uncertain demand.
Is Archer Aviation Stock a Good Buy?
Despite the stock’s speculative nature, Wall Street analysts remain optimistic about the company. Based on eight recent ratings, Archer Aviation boasts a “Strong Buy” consensus with an average 12-month price target of $12.06. This implies a 22.81% upside from the current price.
