Stock Market

Archer Aviation: The Underdog eVTOL Player Poised for Takeoff

Is Archer Aviation (NYSE:ACHR) in perfect financial condition right now? The answer is: definitely not. On the other hand, Archer Aviation can be forgiven for being a “work in progress.” When you see the progress that this flying-taxi specialist has made, you’ll surely want to hold ACHR stock this year. 

Just to recap, Archer Aviation manufactures electric vertical takeoff and landing vehicles. As we’ll discover, the company is also diversifying into the eVTOL infrastructure industry. That’s a smart move, and it’s another reason to stay the course with Archer Aviation stock.

Is ACHR Stock Stuck on the Runway?

Since 2022, it might have felt like ACHR stock just can’t get off the ground. The stock keeps coming back to $5. Unfortunately, there’s no way to know exactly when Archer Aviation’s investors will get the 2x, 3x or 4x share-price move they’ve been waiting for.

However, I don’t view this as a problem for long-term investors. Instead of focusing on what’s hot and popular, the greatest returns come to those who see what’s underappreciated now but will be front-page news in five or 10 years.

Archer Aviation and the eVTOL industry could be front-page news in due time. There’s no way to rush this process, as there are regulatory hurdles to clear. Rest assured, however, that Archer Aviation is making headway.

For instance, the company received Part 145 certification from the Federal Aviation Administration. This certification enables Archer Aviation to “to perform specialized aircraft repair services while maintaining the highest levels of safety and compliance.”

Archer Aviation Delves Into eVTOL Infrastructure

Along with being patient, investors need to have some faith in Archer Aviation, especially from a financial perspective. The fact is, Archer Aviation incurred a GAAP-measured net earnings loss of $109.1 million in 2023’s fourth quarter.

This is to be expected in an early-stage industry, such as the eVTOL industry. If you’re an absolute stickler for profitability, then ACHR stock might not be right for you.

However, if you’re still skeptical, just consider the progress that Archer Aviation is making. The company expects to complete 400 test flights this year. Archer Aviation is “well underway in constructing” three conforming/compliant Midnight eVTOL aircraft.

Archer Aviation is making a smart move by delving into eVTOL infrastructure. Specifically, the company is working with Falcon Aviation to build an eVTOL vertiport network in Dubai and Abu Dhabi, in the United Arab Emirates (United Arab Emirates).

That’s a brilliant move because it will enable Archer Aviation to begin eVTOL operations in the UAE “as soon as 2025.” So, even if Archer Aviation isn’t profitable right now, the company might generate income sooner than the skeptics think.

If You’re Bold, Then ACHR Stock Is a Hold

Archer Aviation stock is likely to be volatile as the eVTOL industry is still developing. Also, don’t be surprised if the stock gets “stuck on the runway” sometimes.

Archer Aviation is making headway toward the goal of starting global eVTOL flight operations. Delving into the eVTOL infrastructure industry will be a key step toward this goal for Archer Aviation.

Hence, I encourage investors to hold on to ACHR stock and be prepared for a long but potentially profitable flight.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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