Is Archer Aviation Stock a Buy Below $9?

Core Viewpoint - Archer Aviation is positioned as a potential disruptor in the transportation sector with its electric vertical takeoff and landing (eVTOL) technology, but faces significant challenges in revenue generation and regulatory approval [1][9]. Group 1: Company Overview - Archer Aviation trades below $9 per share and aims to have its eVTOL vehicles operational by the end of 2025, targeting major urban traffic alleviation [2]. - The company has a backlog of approximately$6 billion, with each Midnight vehicle priced around $5 million, indicating strong demand from various partners [3]. - Archer plans to manufacture 10 Midnight aircraft in 2025, primarily for testing and regulatory certification with the FAA [4]. Group 2: Financial Performance - Currently, Archer Aviation generates no revenue, and if it sells all 10 aircraft in 2025, it would only achieve$50 million in revenue, which is minimal compared to its $5 billion market cap [7]. - The company is experiencing a cash burn of$451 million annually, with a total liquidity position of around $1 billion [7][8]. - Share count has increased by 125% over the past few years, leading to potential dilution for shareholders [8]. Group 3: Market and Regulatory Challenges - Archer Aviation has not yet proven its products can operate effectively, and it is still awaiting regulatory approval to operate in urban environments [10]. - The potential for high cash burn is expected to continue for many years, with slim profit margins anticipated even if sales increase significantly [11]. - The company has secured a new defense contract partnership with Anduril, but this is not expected to have a meaningful impact on the business in the near term [12].