Short Sellers Are Targeting Archer Aviation Stock. Should You Ditch ACHR Shares Now?
Founded in 2018, Archer Aviation (ACHR) is seeking to disrupt air travel with the development of electric vertical takeoff and landing (eVTOL) aircraft. Aiming to revolutionize urban air mobility, Archer's shares have soared by a sensational 217% in the past year, propelling its market cap to nearly $5.9 billion.
However, the high-flying stock dove in late-May after Culper Research came out a new short report on the company. Alleging that Archer has 'systematically misled, deceived, or outright lied' to investors about almost all milestones related to the development and testing of its eVTOL aircraft, Midnight, the firm went on to further say Archer's continued promotion of near-term commercialization is 'not only premature, but reckless.'
Dismissing the allegations as baseless, the company stated "Culper is not a credible research institution. Archer has attracted significant attention due to its recent momentum and positive high-profile news. [Founder Christian Lamarco's] claims are baseless.'
So, what should investors do about ACHR stock now? A deeper look into the company's financials, strategies, and operational initiatives may help to make an informed choice.
Losses Narrowed in Q1
Archer's results for the most recent quarter saw its losses narow dramatically to $0.17 per share from $0.36 per share in the year-ago period. Along with that, the pre-revenue company more than doubled its cash balance to just over a billion dollars at $1.03 billion.
Meanwhile, although adjusted EBITDA losses widened to $109 million from $86.8 million in Q1 2024, the company revealed some encouraging developments in the quarter. The company forged a partnership with AI-led data analytics platform Palantir (PLTR) for the development of next-gen software utilizing AI to improve a range of aviation systems.
Notably, Archer already has a presence in the defense sector through its earlier partnership with Anduril to build a hybrid aircraft platform in an expected multibillion dollar opportunity.
Next, Archer announced the 'Launch Edition' program in February to accelerate the commercial deployment of Midnight while also securing two key customers in Abu Dhabi Aviation and Ethiopian Airlines.
Finally, it also received a major boost after being named the official air taxi partner for the 2028 Olympics in Los Angeles.
Potential to Be an Aviation Gamechanger
Archer stands among the frontrunners in a fast-expanding industry poised for dramatic transformation. Industry projections suggest that by 2030, over 2,000 commercial eVTOL aircraft could be delivered, underlining a robust global compound annual growth rate of 54.9% between 2024 and 2030.
To maintain its leadership position within this accelerating space, Archer continues to build strategic momentum. Most recently, the company unveiled plans to establish an urban air mobility network in New York City. In support of this initiative, Archer is collaborating with major aviation infrastructure providers, including Atlantic Aviation, Signature Aviation, and Skyports, as they adapt existing airport facilities for electric aircraft. The company also broadened its network by bringing Modern Aviation and Air Pegasus on board. In partnership with United Airlines (UAL), this project aims to create seamless 5- to 10-minute flight routes connecting key regional airports to central Manhattan and surrounding urban nodes.
Progress on the technical front is also advancing. Archer is preparing to initiate piloted flight trials, a pivotal step in its development journey that could significantly reduce execution risk and move the company closer to commercial readiness.
Additionally, Archer has already secured an order pipeline exceeding $6 billion, reflecting strong demand not only domestically, but also in international markets such as the Middle East and Africa —where it has an existing arrangement with Abu Dhabi Aviation. Further bolstering its operational readiness, Archer recently received FAA type certification for its Midnight aircraft. This regulatory milestone confirms that the aircraft meets key criteria related to airworthiness, emissions, noise, and safety, effectively positioning the company to begin fulfilling its substantial backlog.
Analyst Opinions on ACHR Stock
Analysts have given Archer stock a 'Moderate Buy' with a mean target price of $12.25, which indicates upside potential of about 17% from current levels.
Out of nine analysts covering the stock, five have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and two have a 'Hold' rating.
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