Justin Pope, The Motley Fool
5 min read
In This Article:
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Archer Aviation is preparing to take off with potential launches for government and commercial customers.
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Recent fundraising has bolstered Archer's liquidity and solidified its near-term financial footing.
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Cloudy competitive dynamics and execution risks make Archer a questionable value at its current market cap.
Flying cars could soon be more of a reality than science fiction.
Several companies are developing electric vertical take-off and landing (eVTOL) aircraft, including Archer Aviation (NYSE: ACHR), which hopes to ship its first piloted commercial unit later this year. The stock has also lifted off, soaring over 160% over the past 12 months.
Experts estimate that eVTOLs could become a $17 billion industry over the next decade and will likely grow well beyond that, with use cases spanning government applications and the commercial sector, including alleviating traffic congestion in cities.
But is now the time to buy Archer Aviation stock? Here is what you need to know.
The company is gearing up to monetize its first model, the Midnight aircraft. It's an eVTOL designed for short, rapid flights (20 to 50 miles) and seats four passengers, excluding the pilot. Archer Aviation could soon be off to the races with multiple business opportunities in motion:
Last summer, Archer Aviation delivered its first Midnight aircraft to the United States Air Force for testing to ramp up its AFWERX Agility Prime contract, worth up to $142 million. In December, it announced a partnership with Anduril, a private defense company, in a joint venture to produce a hybrid propulsion aircraft for defense applications.
Archer Aviation has a launch program for early commercial customers. It has struck deals for deployments with three non-U.S. companies: Abu Dhabi Aviation (United Arab Emirates), Ethiopian Airlines (Ethiopia), and PT Industri Ketahanan Nasional (Indonesia). Archer plans to ship its first unit to Abu Dhabi Aviation over the coming months, with plans to launch later this year.
United Airlines has invested in Archer Aviation and partnered with the company to develop an air taxi network in New York City, utilizing Archer's Midnight aircraft to connect people in Manhattan to the area's airports. Additionally, Archer Aviation became the official air taxi of the 2028 Olympic Games in Los Angeles.
Finally, on June 11, President Donald Trump signed three executive orders, including one to establish an eVTOL Integration Pilot Program. It should help ease regulatory red tape and accelerate the growth of eVTOLs in the United States.
