Aircraft developer Archer Aviation (ACHR) recently signed an agreement with Saudi Arabia’s General Authority of Civil Aviation (GACA) to accelerate the deployment of air taxis in the country.
This development aims to establish a regulatory framework that allows the introduction and expansion of air taxi deployment. This may also be a step towards commercializing the service in the US, as the framework is expected to align with Federal Aviation Administration (FAA) regulations.
So should you consider buying shares now?
Archer Aviation creates electric vertical takeoff and landing (eVTOL) aircraft for fast air taxi services in busy cities. These planes help people avoid traffic by taking short trips, such as to airports or across town. The company’s main focus is its Midnight model, which seats one pilot and four passengers and flies at speeds of up to 150 mph.
It also creates strategic partnerships with airlines, automakers and government agencies to support fleet deployment, infrastructure and operations. Headquartered in San Jose, California, Archer Aviation has a market capitalization of $5.45 billion.
Investor concerns about execution risks, given the company’s pre-earnings status, have led to a volatile share price trajectory. Over the past 52 weeks, the stock has gained 15.76%. However, in the last six months, it has fallen 29.7%. Archer Aviation shares had hit a 52-week high of $14.62 in October, but are down 41.5% from that level.
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Archer Aviation shares are trading near a reasonable valuation. Its price-to-book ratio of 3.30 times compares to the industry average of 3.18 times.
During the third quarter, the company carried out several strategic initiatives to advance its goal of creating a sustainable air taxi network. In October, Archer Aviation won a bid to acquire the portfolio of Lilium (LILMF) GmbH, with around 300 advanced air mobility patent assets. Lilium has spent more than $1.5 billion developing eVTOL-enabling technologies, which are expected to bolster Archer Aviation’s portfolio.
Additionally, the company partnered with Korean Air to market the Midnight eVTOL aircraft in Korea. As part of the deal, Korean Air plans to buy up to 100 Midnight aircraft. Additionally, Archer Aircraft became part of phase one of the Tokyo “eVTOL Deployment Project” last month.
It seems that Archer Aircraft’s strategy is to acquire assets to advance its development. Along these lines, the company announced that it has signed definitive agreements to acquire Hawthorne Airport in Los Angeles. The site is expected to serve as an operational center for its air taxi network. The aviation asset is close to LAX and strategically located near several key locations. In December, Archer Aviation completed the first phase of this transaction.
As of the third quarter of 2025, Archer Aviation has not generated significant revenue. Meanwhile, its total operating expenses increased 43.2% year-over-year (YOY) to $174.80 million. However, this was down from the $176.10 million it had recorded in the previous quarter. The adjusted EBITDA loss was $116.10 million. However, Archer Aviation is not short of liquidity, with cash, cash equivalents and short-term investments totaling $1.64 billion, up 227.1% year-over-year.
The company is seeking FAA clearance for its Midnight aircraft, but Archer Aviation reported a setback in this process as the recent US government shutdown affected the FAA. It is preparing for Type Inspection Authorization (TIA) testing as part of the fourth and final phase of Midnight’s certification program. Archer Aviation may be considering deployments to the US next year.
Wall Street analysts are optimistic about Archer Aviation’s ability to reduce its losses. For the current quarter, losses are expected to decline 52.8% year over year to $0.25 per share. For the current year, losses are expected to decline 27.5% year over year to $1.03 per share, followed by another 7.8% reduction to $0.95 per share the following year.
While Goldman Sachs analysts initiated coverage of Archer Aviation shares with a “Neutral” rating and a $11 price target, they also noted the company’s outsourcing strategy, which has led to lower R&D spending and reduced the time to build an operational aircraft. And Goldman Sachs analysts noted that the company’s plane could be the most capable based on takeoff weight and payload metrics.
Last month, analysts at Canaccord Genuity raised their price target on Archer Aviation from $12 to $13, while maintaining a “Buy” rating. The target price increase was driven by the company’s multiple projects, including the supply of eVTOL propulsion systems for the Omen project and participation in a hybrid-electric VTOL project with Anduril.
Wall Street analysts are firmly bullish on Archer Aviation stock, with analysts giving it a consensus rating of “Moderate Buy.” Of the 10 analysts rating the stock, four analysts have given it a “Strong Buy” rating, two analysts have rated it a “Moderate Buy” rating, while four analysts are playing it safe with a “Hold” rating. The consensus price target of $11.61 represents a 35.6% upside from current levels. The Street’s high price target of $18 represents an upside potential of 110.3%.
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Archer Aviation is laying the foundation to support its imminent commercialization through strategic partnerships and notable asset acquisitions. Therefore, this air taxi stock could be a good buy now in its pre-flight stage.
As of the date of publication, Anushka Dutta had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
