Archer Aviation Inc (NYSE: ACHR)

Archer Aviation Inc (NYSE: ACHR) is an aerospace company focused on designing and developing electric vertical takeoff and landing (eVTOL) aircraft for urban air mobility (UAM) networks. Its eVTOL aircraft are engineered for safety, sustainability, and low noise. The company’s production model, Midnight, features a unique 12-tilt-6 aircraft configuration.

Positive Growth Prospects

• Strong Progress Toward Commercialization: Archer Aviation has made significant strides in transitioning from concept to commercialization, particularly with its Midnight eVTOL aircraft. The company has nearly completed Phase 3 of the FAA’s four-phase type certification process and is progressing rapidly through Phase 4, bringing it closer to securing regulatory approval. Additionally, the release of the powered-lift Special Federal Aviation Regulation (SFAR) by the FAA aligns well with Archer’s commercial operations, further solidifying its path toward market entry.
• Expansion into Global Markets: Archer has taken strategic steps to establish a presence in international markets, securing agreements in both the UAE and Japan. In the UAE, the company formed a consortium with the Abu Dhabi Investment Office (ADIO) to launch air taxi services as early as Q4 2025. Meanwhile, in Japan, Archer entered into an agreement with Japan Airlines and Sumitomo Corporation’s joint venture, Soracle, for a planned purchase of up to USD 500 million worth of aircraft. These deals highlight Archer’s ability to form strategic partnerships that support its expansion and strengthen its order book, which now exceeds USD 6 billion.
• Financial Stability and Manufacturing Readiness: With over USD 500 million in cash and cash equivalents, Archer maintains a strong liquidity position, ensuring it has the financial resources to support its growth. Furthermore, its high-volume manufacturing facility is nearing completion, with production of the Midnight aircraft set to begin in early 2025. The company aims to ramp up production to two aircraft per month by the end of the year, demonstrating its capability to scale efficiently. The facility was completed on time and within budget at approximately USD 65 million, further underscoring Archer’s operational discipline.

Growth Challenges

• Continued Financial Losses: Despite its strong liquidity position, Archer reported a significant net loss of USD 115.3 million in Q3 2024. Its operating expenses totaled USD 122.1 million (GAAP), with an adjusted EBITDA loss of USD 93.5 million. While the company has kept quarterly spending nearly flat, the high level of ongoing expenses raises concerns about profitability, especially as Archer prepares for commercial operations. The reliance on additional capital, such as the proposed USD 400 million from Stellantis, indicates that the company may need further financial support to sustain its expansion.
• Regulatory and Certification Risks: Although Archer has made notable progress in the FAA certification process, regulatory approval remains a critical hurdle. The completion of Phase 3 and advancement in Phase 4 do not guarantee final approval, and any unexpected delays could impact the company’s timeline for commercial launch. Furthermore, the broader eVTOL industry is still in its early stages, and evolving regulations may introduce additional challenges that could affect Archer’s commercialization plans.
• Execution Risks in Manufacturing and Market Adoption: While Archer’s new manufacturing facility represents a key milestone, the company still faces challenges in ramping up production and ensuring consistent quality at scale. Achieving its goal of producing two aircraft per month by the end of 2025 will require smooth execution, efficient supply chain management, and demand alignment. Additionally, while Archer has secured indicative orders, these remain conditional and subject to further definitive agreements. Market adoption of eVTOL technology is still uncertain, and Archer must navigate potential obstacles such as public acceptance, infrastructure readiness, and competition within the industry.

Technical Observation (on the daily chart):

The stock experienced a strong uptrend from October 2024 to early 2025 but is now in a pullback phase, testing support around USD 8.35. The 21-day and 50-day moving averages remain bullish, though recent selling pressure has weakened momentum. RSI is near 40, indicating neutral to slightly weak conditions, while volume suggests profit-taking. If support holds, the uptrend may resume; otherwise, a break lower could signal further downside.

Archer Aviation has made significant progress toward commercialization, with strong advancements in FAA certification, global expansion through partnerships in the UAE and Japan, and a well-funded financial position supporting its high-volume manufacturing plans. However, the company continues to face challenges, including substantial financial losses, regulatory uncertainties, and execution risks in scaling production and securing market adoption. While Archer is positioned as a leader in the eVTOL industry, its success will depend on overcoming these hurdles to achieve sustainable growth. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Archer Aviation Inc (NYSE: ACHR) at the closing market price of USD 8.35 as of February 24,2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is February 24,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.