Archer Aviation stock price has moved sideways in the past few months. ACHR was trading at $10.3 on Tuesday, down by over 25% from the highest point this year, and 270% above its lowest point in 2024. This performance has brought its market capitalization to about $6 billion.
Is Archer Aviation stock a good buy?
Archer Aviation, one of the biggest companies in the Electric Vertical Take-Off and Landing (eVTOL) industry, has lagged behind Joby.
While its stock has lagged, Joby Aviation stock has jumped to a record high, with its market capitalization of over $16 billion.
This is notable as the two companies are largely in the same stage and are working on similar aircraft. They are also backed by similar companies, with Joby’s biggest investor being Toyota Motor. Stellantis, the parent company of Jeep and Chrysler, backs Archer Aviation.
Joby and Archer’s planes have a capacity of one pilot and 4 passengers. The key differences are that Joby’s S4 has a 200-mile range and a top speed of 200 mph. Archer Aviation has a 100-mile range and up to 150 mph speed.
Most importantly, the two companies are accelerating their certification process. Archer Aviation plans to start commercial operations lin the United Arab Emirates later this year and then expand to the US in 2025. Joby plans to start these operations in 2026.
Additionally, Archer Aviation, like Joby, has already established a backlog. United Airlines has placed an order of up to 200 Midnight planes worth about $1 billion.
Future Flight Global has placed an order for 116 aircraft valued at over $580 million. Other players that have placed orders are Soracle, a partnership between Japan Airlines and Sumitomo, and US Air Force. Archer also reached a deal valued at over $250 million from Indonesia.
Therefore, Archer Aviation is either an undervalued company or Joby is highly overvalued. Joby has surged because of its recent announcements such as the $250 million investment and the recent acquisition of Blade Air Mobility.
ACHR earnings ahead
The next important catalyst for the Archer Aviation stock price will be the upcoming earnings, which will provide more details about its spending and losses.
Its most recent earnings showed that its operating expenses stood at $144 million in the first quarter, up from $142.2 million in the same period last year. Its net loss narrowed from $116 million to $93.4 million.
Archer Aviation expects that its third-quarter adjusted EBITDA loss will be between $100 million and $120 million, higher than the $109 million it lost in the first quarter. It ended last quarter with over $1 billion in cash and equivalents.
So, is it a good investment? eVTOL companies are still highly risky companies as the industry is untested. On the positive side, ACHR has catalysts, including that the valuation gap has widened, Trump is simplifying regulations and the company is planning to launch its commercial services this year.
Archer Aviation stock price technical analysis
The daily chart shows that the ACHR stock price has remained in a tight range in the past few days. It has consolidated at the 50-day and 100-day Exponential Moving Averages (EMA).
Archer Aviation stock has formed an inverse head-and-shoulders pattern. Therefore, the stock will likely rebound, and possibly retest the neckline at $13.9, which is up by about 32% above the current level.
Read more: Archer Aviation stock warning: why experts call it ‘an invitation to your funeral’
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