Is Archer Aviation Stock a Buy, Sell, or Hold for July 2025?

Yahoo

01-07-2025

With every new milestone, the once-distant dream of flying taxis is quickly becoming a near-term reality. The electric vertical takeoff and landing (eVTOL) aircraft industry is still in its developmental stages, but progress is picking up speed. Most manufacturers are now laser-focused on testing and obtaining certifications as they gear up to meet anticipated demand. According to projections, the global eVTOL market could reach $1.75 billion by 2028, growing at an impressive compound annual growth rate (CAGR) of 36% from 2024 to 2028.
One company making headlines in the eVTOL space is Archer Aviation (ACHR). Although the firm has yet to generate any revenue, ACHR stock has been attracting massive investor interest due to the company's bold vision and growing list of airline partnerships. The company aims to launch air taxi services in major metropolitan areas, hoping to change how people move around cities in the near future. But with no commercial operations yet and a lot riding on future execution, should investors buy, sell, or hold ACHR stock in July?
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Flying taxis may still sound futuristic, but companies like Archer are working diligently to make them part of everyday life. Based in California, Archer is developing eVTOL aircraft, which are somewhat like helicopters but operate quietly and cleanly thanks to battery power. Designed for short urban trips, these air taxis could soon offer a new way to bypass ground traffic in crowded cities.
Midnight, the company's flagship aircraft designed for 20- to 50-mile hops, is nearing its commercial debut later this year. In mid-June, the company entered into a partnership with Jetex to help develop the infrastructure for its air taxi service. The collaboration commences in the United Arab Emirates and will be extended across Jetex's network of 40 private terminals in over 30 countries, paving the way for a global rollout.
Archer also got a boost this past month from a new executive order signed by President Donald Trump aimed at accelerating the growth of U.S. drone and eVTOL technologies. The order calls for expanded testing, including 'beyond visual line of sight' flights and dedicated eVTOL pilot programs, potentially clearing regulatory roadblocks for Archer's Midnight aircraft as it moves closer to commercial launch.
Presently commanding a market capitalization of around $5.8 billion, shares of this flying taxi company have gained 11% so far this year. However, the stock's longer-term performance is far more striking. Over the past year, ACHR stock has skyrocketed 208%, easily dwarfing the broader S&P 500 Index's ($SPX) modest 14% gain during the same stretch, signaling strong investor enthusiasm for Archer's future in urban air mobility.
Archer Aviation's fiscal 2025 first-quarter results, released on May 12, showed progress on some fronts and heavier spending on others. The company reported a net loss of $93.4 million, or $0.17 per share. That was a major improvement from the $116.5 million loss, or $0.36 per share, in the same quarter last year. The reported loss was also better than Wall Street's forecast loss of $0.26 per share.
On the other hand, adjusted EBITDA sank further to a loss of $109 million, widening from a $86.8 million loss a year ago. Non-GAAP operating expenses jumped 27% year-over-year (YOY) to $113.1 million, reflecting Archer's aggressive push to scale operations and prepare for its upcoming commercial debut.
Despite posting losses and having yet to generate any revenue, Archer Aviation remains in a strong financial position with over $1 billion in cash and equivalents, one of the largest cash cushions in the advanced air mobility space. This solid war chest provides the company with an ample runway to execute its bold vision, from launching commercial operations in the UAE later this year to laying the groundwork for an air taxi network in New York City.
Archer is also investing in future-proofing its technology. During the quarter, it announced a strategic partnership with Palantir Technologies (PLTR) to develop cutting-edge artificial intelligence (AI) solutions tailored for next-generation aviation.
Looking ahead, Archer is bracing for an adjusted EBITDA loss of $100 million to $120 million in Q2. Over the longer term, analysts tracking the company expect losses to narrow by roughly 30.3% YOY to $0.99 per share in fiscal 2025.
Overall, Archer Aviation continues to earn Wall Street's vote of confidence, with analysts sticking to a cautiously bullish 'Moderate Buy' rating. Of the nine analysts offering recommendations, five give it a solid 'Strong Buy,' two suggest a 'Moderate Buy,' and the remaining two recommend a 'Hold' rating.
ACHR stock's average analyst price target of $11.94 indicates 10% potential upside from current price levels. However, the Street-high price target of $18 suggests that shares can rally as much as 66% from current levels.
Archer Aviation may not be generating revenue yet, but it's building serious momentum, backed by strong partnerships, solid fundamentals, and analyst support. As the countdown to commercial launch continues, Archer remains a compelling name to watch in the race to reshape urban transportation.
On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com