24/7 Wall St. Insights:
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Archer Aviation (ACHR) is scheduled to report Q1 earnings after the closing bell today.
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Investors will be watching the eVTOL leader not so much for its financials, as it is essentially a pre-revenue stock, but rather for FAA certification progress reports and partnership updates.
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With the eVTOL industry expected to grow 55% annually for the next five years, it is a massive opportunity for the robotaxi stock.
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Archer Aviation (NYSE:ACHR) is a leading pioneer in electric vertical takeoff and landing (eVTOL) aircraft. The robotaxi stock is a key player in the rapidly growing urban air mobility sector that is projected to reach $170.6 billion by 2034, a 55% compound annual growth rate.
Archer’s flagship Midnight aircraft, designed for short-range air taxi services, positions the eVTOL stock to compete with rivals like Joby Aviation (NYSE:JOBY), leveraging partnerships with United Airlines (NASDAQ:UAL) and Stellantis (NYSE:STLA), and recently with Abu Dhabi Aviation to start flying Midnight aircraft later this year, supported by Archer’s pilots, technicians, and engineers.
Already there are immediate growth drivers present that aren’t apparent in ACHR’s $8.81 per share stock price. Those include Federal Aviation Administration certification progress, a new Georgia manufacturing facility targeting two aircraft per month by late 2025, and a $500 million order from Japan’s Soracle.
Archer Aviation reports first-quarter earnings after the market closes today, with investors eyeing updates on production, certifications, and cash burn. Regardless of what the eVTOL leader reports today, ACHR stock is a buy.
Leadership in the eVTOL Market
The Midnight aircraft is designed for 20-minute, 100-mile urban air taxi flights and targets the urban air mobility market. Unlike competitors such as Joby, Archer emphasizes cost-efficient design, with Midnight’s production costs around 50% lower than traditional helicopters, according to Archer.
Its partnership with United Airlines, aiming for commercial eVTOL services by 2026 in Chicago and Los Angeles, and a $1 billion order book, including Japan’s Soracle, underscore the inherent demand for short-haul robotaxi services.
Archer’s proprietary software and vertical integration enhance the scalability of its operations and position it to capture a significant share of the U.S. air taxi market, which Morgan Stanley thinks could be worth $1 trillion by 2040 and $9 trillion by 2050.
FAA Certification Progress
Obviously, Archer’s immediate growth hinges on regulatory milestones. In 2024, it secured the FAA’s Part 135 Air Carrier Certification, a critical step toward commercial operations, and is on track for Type Certification of the Midnight by late 2025.
Recent test flights, with over 400 completed in 2024, not only demonstrate the aircraft’s reliability, but it achieved a 97% safety rating. Notably for Archer and the rest of the eVTOL industry, the FAA’s streamlined eVTOL framework has been very accommodating and has reduced approval timelines.
Archer’s first-quarter earnings are expected to provide updates on pilot training and final assembly, key to meeting its 2026 commercial launch timelines. Delays, however, could pressure the stock, as happened with Joby after it suffered some delays last year, which caused its stock to dip 15%.
Manufacturing and Strategic Partnerships
Archer’s new Covington, Georgia facility, backed by Stellantis, began production in 2024 and targets two Midnight aircraft per month before scaling to 650 annually by 2030. The $150 million facility, funded partly by the automaker’s $55 million investment, leverages automotive manufacturing expertise while reducing costs 30% compared to its peers.
The partnership with Abu Dhabi Aviation also expands Archer’s global footprint, complementing deals with Southwest Airlines (NYSE:LUV) and UAE’s Falcon Aviation. These alliances, coupled with $834.5 million in cash reserves at the end of last year, mitigate any concerns about its near-term cash burn, though further funding may be needed by 2027.
Why ACHR Is a Buy
ACHR’s $4.8 billion market cap and price-to-book ratio of 5.9 suggest it is undervalued relative to the competition (Joby’s P/B is 6.2), but also its $1 billion order book and the eVTOL market’s growth potential.
Analyst consensus is upbeat with seven of the nine analysts following ACHR stock rating it a buy. They have also assigned a one-year price target of $11.61 per share, implying 32% upside from current levels. ACHR stock has already doubled in 2025 and is up 172% over the last 12 months.
Investors will be watching earnings for production ramp-up and partnership updates, which could boost confidence. The actual results are less meaningful, all things being equal, as it is a pre-revenue company poised for liftoff.
Yet ACHR stock will still be a buy even after earnings, no matter which way its shares go. The eVTOL stock is certainly a speculative buy appropriate only for risk-tolerant investors, but it offers high reward potential if certification and production succeed, potentially doubling by 2027.
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