Archer Aviation Stock Is Down Roughly 50% This Year. Here's Why I'm Still Buying.
Archer is down but not out.
Archer Aviation's shares have plummeted by approximately 50% this year, bringing the price down to around $4 per share from an opening price of about $8. Despite the stock's decline, Archer has managed to make substantial progress in the electric vertical takeoff and landing (eVTOL) industry. The company, along with Joby Aviation, is at the forefront of this emerging urban air mobility market, which analysts have valued at a potential $9 trillion by 2050.
This year, Archer has completed a critical milestone by successfully finishing Phase 3 of the Federal Aviation Administration's (FAA) four-phase type certification process, the first eVTOL company to do so. In addition, Archer has conducted over 70 test flights, including a 12-minute flight between Salinas and Hollister, California, showcasing the efficiency of its aircraft.
However, Archer's stock price hasn't reflected this progress, as the company has yet to generate any revenue from its eVTOL business. Announcing the acquisition of three Boeing subsidiaries, including Insitu, a profitable military drone maker generating over $200 million in annual revenue, Archer could soon see a significant revenue stream.
Despite these positive developments, there are still risks, such as Boeing's potential ownership stake diluting existing shareholders and Archer's substantial annual expenses of $284 million last quarter. Despite the risks, Archer's progress and potential revenue generation make it an attractive buy for investors willing to accept the associated risks.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
