Archer Aviation Inc. ACHR recently released its first-quarter 2025 results. The company reported a loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 21 cents. ACHR ended the first quarter with a robust cash position of $1.03 billion, which should ensure sufficient liquidity for the upcoming production and deployment phases of its Midnight Electric Vertical Take-Off and Landing (eVTOL) aircraft.

The quarterly results also highlighted the company’s plans to deliver its first piloted Midnight aircraft to the UAE this summer, with commercial operations slated to start later this year.

Such better-than-expected quarterly performance and developmental updates might encourage investors interested in eVTOL manufacturers to add ACHR stock to their portfolio. However, before making any hasty decision, it would be prudent to take a look at ACHR’s recent performance at the bourses, its long-term prospects as well as risks (if any) to investing in the same. This would help investors make a more insightful decision.

ACHR Stock Outperforms Its Industry, Sector & S&P500

Archer Aviation’s shares have surged a solid 36.4% in the year-to-date period, outperforming the Zacks Aerospace-Defense industry’s growth of 16.1% as well as the broader Zacks Aerospace sector’s gain of 13.4%. It has also surpassed the S&P 500’s return of 0.7% in the same time frame.Zacks Investment Research

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A similar stellar performance can be seen in the shares of other industry players, such as Embraer ERJ and The Boeing Company BA, which have witnessed year-to-date surges of 33.1% and 16.1%, respectively.

What’s Been Pushing ACHR Stock Up?

Archer Aviation has made some significant progress in recent times in relation to launching its Midnight aircraft in the commercial market, developments associated with it, as well as its growing venture in the defense space. Notably, ACHR started this year by raising equity capital worth $301.8 million (in February 2025) with the aim of accelerating the development of its hybrid aircraft platform for the defense market and beyond.

Next, the company announced a comprehensive “Launch Edition” commercialization program for its Midnight aircraft, with Abu Dhabi Aviation becoming ACHR’s first Launch Edition customer. Then, in March, ACHR signed an agreement with Ethiopian Airlines, making it the second customer to plan deploying Archer’s Midnight aircraft under the “Launch Edition” program.

In April, the company received the design approval for the planned transformation of an Abu Dhabi Cruise Terminal helipad into a hybrid heliport. On completion, this will serve as the first hybrid heliport available for early commercial air taxi operations in Abu Dhabi, paving the way for early operations of ACHR’s Midnight aircraft planned with Abu Dhabi Aviation.

Story Continues

All these achievements must have boosted investors’ confidence in this stock lately, which, in turn, has been duly reflected in its year-to-date share price hike.

Can ACHR Stock Hold Onto Its Winning Streak?

As urban traffic congestion worsens, there is a growing demand for sustainable, low-emission transportation alternatives. This shift is driving interest in eVTOL aircraft, which offer efficient and environmentally friendly mobility solutions. Archer Aviation’s Midnight jet is well-positioned to capitalize on this trend. 
Once commercially available, it could see strong adoption in urban air mobility markets, potentially accelerating revenue growth and solidifying Archer’s role as a leader in next-generation transport solutions.

Thus, once Archer Aviation’s Midnight aircraft becomes commercially available, the company is expected to witness strong adoption of this jet in urban air mobility markets. This should potentially accelerate its revenue growth and solidify Archer’s position as a leader in next-generation transport solutions.

A sneak peek at ACHR’s near-term earnings estimates also reflects this.

Earnings Estimates for ACHR

The Zacks Consensus Estimate for second-quarter and full-year 2025 earnings indicates a year-over-year improvement. The consensus estimate for 2026 also mirrors a similar trend.

However, the consensus mark for its 2025 and 2026 earnings reflects a downward revision, indicating declining investor confidence in the stock’s earnings growth capabilities.Zacks Investment Research

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Risks to Consider Before Choosing ACHR Stock

Archer Aviation shows encouraging near-term potential, but its long-term sustainability remains uncertain. In particular,  the eVTOL market is still in its infancy, and ACHR’s success hinges not only on its ability to design, certify, and scale production of its aircraft but also on how the market demand evolves. 
Furthermore, public acceptance of eVTOLs as a viable transportation alternative may be hindered by concerns over safety, noise, and affordability, which could delay their mass adoption. Without broad consumer and regulatory support, the company’s growth trajectory may face headwinds.

Moreover, ACHR is yet to generate any revenue, raising potential concerns among investors about its ability to deliver shareholder value. Unless the company achieves profitability through the successful commercialization of its Midnight aircraft and secures a solid customer base, long-term returns from this stock may remain elusive. Its negative Return on Invested Capital (“ROIC”), which also lags the industry’s ROIC, further justifies that.Zacks Investment Research

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ACHR’s industry peer, Boeing, also delivered a negative ROIC. However, another of ACHR’s industry peers, ERJ, boasts a ROIC of 14.24, which is also higher than the industry’s ROIC.

What Should an Investor Do?

Investors interested in Archer Aviation stock should wait for a better entry point, considering its negative ROIC and a downward revision in near-term earnings estimates.

However, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering the stellar performance of its shares in the year-to-date period, its solid cash flow position, and the year-over-year improvement reflected in its upcoming earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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