Leo Sun, The Motley Fool
5 min read
In This Article:
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Archer Aviation plans to deliver a lot more aircraft.
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Rocket Lab plans to launch more rockets.
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One of these companies has a clearer vision for the future.
Archer Aviation (NYSE: ACHR) and Rocket Lab USA (NASDAQ: RKLB) are both highly speculative aerospace stocks. Archer is a developer of electric vertical take-off and landing (eVTOL) aircraft, while Rocket Lab sells reusable orbital rockets. But over the past 12 months, Archer's stock soared more than 220% as Rocket Lab's stock surged over 500%.
Let's see if either of these hot stocks is worth buying as a growth play today.
Archer's flagship Midnight eVTOL aircraft can carry one pilot and four passengers. It can travel up to 100 miles on a single charge with a maximum speed of 150 miles per hour. It promotes the Midnight as a cheaper, greener, and easier-to-land alternative to helicopters, and it's already working with major airlines, automakers, and the U.S. Air Force to provide air taxi services.
The company also plans to launch its own air taxi service, which it claims will cost roughly the same as Uber Technologies' premium UberBlack service within the next two years.
Archer's backlog already includes hundreds of orders, and it claims it can increase its annual production to 10 aircraft in 2025, 48 aircraft in 2026, 252 aircraft in 2027, and 650 aircraft in 2028. It believes it can eventually manufacture up to 2,000 aircraft annually as it scales up its business.
That growth trajectory would be incredible, but Archer has only delivered a single Midnight aircraft to the U.S. Air Force so far. That delivery didn't generate any revenue because it was a test aircraft, but Archer expects to deliver its first "revenue-generating" aircraft to Abu Dhabi Aviation for its new air taxi service by the end of this year.
Archer also partnered with Palantir Technologies, a leading provider of analytics and AI services for the U.S. government, this March to accelerate the production of its aircraft and strengthen its aviation systems.
Analysts expect Archer's revenue to rise from nothing in 2024 to $12.7 million in 2025, $143.9 million in 2026, and $437.1 million in 2027. But with a market capitalization of $5.8 billion, it already trades at 13 times its projected sales for 2027 -- so a lot of growth is already baked into its high-flying shares.
The company also won't come close to breaking even anytime soon. But if you expect Archer's eVTOL aircraft to replace helicopters over the next decade, it might just deserve that higher valuation.
