Archer Aviation Inc (NYSE: ACHR)

Archer Aviation Inc. (NYSE: ACHR) is an aerospace company specializing in the design and development of electric vertical takeoff and landing (eVTOL) aircraft for urban air mobility (UAM) networks. Its aircraft are built with a focus on safety, sustainability, and low noise levels. The company’s production model, Midnight, features a distinctive 12-tilt-6 configuration for enhanced performance.

Positive Growth Prospects

• Progress Toward Commercialization: Archer Aviation is making strong advancements in bringing its Midnight eVTOL aircraft to market. The company is nearing completion of Phase 3 in the FAA’s four-phase type certification process and progressing swiftly through Phase 4, moving closer to regulatory approval. Additionally, the FAA’s release of the powered-lift Special Federal Aviation Regulation (SFAR) aligns with Archer’s operational plans, reinforcing its pathway to commercial entry.
• Global Market Expansion: Archer is strategically expanding internationally, securing agreements in the UAE and Japan. In the UAE, it partnered with the Abu Dhabi Investment Office (ADIO) to launch air taxi services as early as Q4 2025. In Japan, Archer established a deal with Japan Airlines and Sumitomo Corporation’s Soracle joint venture for a potential USD 500 million aircraft purchase. These partnerships strengthen Archer’s global presence and contribute to its USD 6 billion+ order book.
• Financial Strength and Manufacturing Readiness: With over USD 500 million in cash and cash equivalents, Archer maintains strong liquidity to support growth. Its high-volume manufacturing facility is nearing completion, with Midnight aircraft production set to begin in early 2025. The company aims to scale to two aircraft per month by year-end, demonstrating its ability to ramp up efficiently. The facility was completed on time and within budget at approximately USD 65 million, showcasing Archer’s operational discipline.

Growth Challenges

• Ongoing Financial Losses: Despite maintaining strong liquidity, Archer reported a net loss of USD 115.3 million in Q3 2024, with GAAP operating expenses of USD 122.1 million and an adjusted EBITDA loss of USD 93.5 million. While quarterly spending has remained stable, high ongoing costs raise concerns about profitability as the company moves toward commercialization. The planned USD 400 million investment from Stellantis highlights Archer’s reliance on additional capital for expansion.
• Regulatory and Certification Challenges: Archer has made significant progress in FAA certification, but final approval remains uncertain. Advancements in Phases 3 and 4 do not guarantee clearance, and any delays could disrupt the commercial launch timeline. Additionally, as the eVTOL industry evolves, regulatory changes could pose further hurdles to Archer’s market entry.
• Manufacturing and Market Adoption Risks: While Archer’s new manufacturing facility marks a major milestone, scaling production to meet its target of two aircraft per month by late 2025 requires flawless execution, supply chain efficiency, and demand alignment. Despite securing preliminary orders, these remain conditional and subject to final agreements. Moreover, market adoption of eVTOL technology is still uncertain, with challenges including public acceptance, infrastructure readiness, and competition in the industry.

Technical Observation (on the daily chart):

The stock has recently entered a corrective phase after a strong uptrend, currently trading at USD 7.26, below the 50-day MA (USD 8.74) and 21-day MA (USD 7.95), indicating bearish momentum. The RSI (40.34) suggests weak momentum but is not yet oversold. Key support lies around USD 7.00 and USD 6.50, while resistance is at USD 8.74 and USD 10.00. A break below support could signal further downside, while a move above resistance may indicate a trend reversal. Volume remains active, suggesting continued investor interest.

Archer Aviation is making strong strides toward commercialization, with notable progress in FAA certification, global partnerships in the UAE and Japan, and solid financial backing for large-scale manufacturing. However, challenges remain, including significant financial losses, regulatory uncertainties, and execution risks in scaling production and market adoption. As a leader in the eVTOL industry, its long-term success hinges on overcoming these obstacles for sustainable growth. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Archer Aviation Inc (NYSE: ACHR) at the closing market price of USD 7.26 as of March 28,2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is March 28,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.