Archer Aviation to Join eVTOL Pilot Program: How to Play the Stock?

Core Insights - Archer Aviation Inc. plans to participate in the White House's electric vertical takeoff and landing (eVTOL) Integration Pilot Program (eIPP) to demonstrate the safety and scalability of its Midnight aircraft [1][2] - The program aims to build public trust and support for air taxis, potentially attracting investors to Archer's stock [2] Company Performance - Archer's stock has declined by 6.6% year-to-date, underperforming the Zacks Aerospace-Defense industry, which grew by 28.7%, and the broader Zacks Aerospace sector, which gained 28.4% [4] - In contrast, competitors like Joby Aviation and Embraer have seen significant stock increases of 77% and 55.7%, respectively, over the past six months [5] Factors Affecting Stock Performance - Allegations from short-seller Culper Research regarding misleading information about the Midnight aircraft's development have negatively impacted investor confidence [7] - A lawsuit allowing to move forward against the company also contributed to a significant drop in stock price, losing nearly 11% in one trading session [8][11] - The company reported lower-than-expected earnings in Q2 2025, further fueling skepticism among investors [12] Market Potential - The global urban air mobility market is projected to grow at a compound annual growth rate of 19.2% from 2025 to 2040, indicating potential for revenue growth once Archer begins delivering its Midnight aircraft [13] - However, the eVTOL industry is still in its early stages, and Archer's success will depend on its ability to design, certify, and scale production effectively [14] Earnings Estimates - The Zacks Consensus Estimate for Archer's near-term earnings indicates a year-over-year improvement, with estimates for the current year at -$0.78 and next year at -$0.76 [16] - The consensus reflects a 30.97% year-over-year growth estimate for the current year, although analysts show limited confidence in the stock's earnings growth capabilities [16] Valuation Metrics - Archer's stock is trading at a trailing 12-month Price/Book (P/B TTM) ratio of 3.47, which is below the industry average of 6.36 [18] - The company has a negative Return on Invested Capital (ROIC), indicating inefficiency in generating returns from its investments [20]