Founded in 2018 and known for its electric vertical takeoff and landing (eVTOL) aircraft, San Jose, CA-based Archer Aviation (ACHR) has been in the news recently. The company recently revealed that it has completed construction on its high-volume manufacturing facility, which is connected to the Covington Municipal Airport in Georgia.
The company aims to revolutionize urban air mobility by creating eVTOL aircraft to transport people within and around cities, offering a sustainable alternative to traditional ground transportation. It is currently targeting to begin production from the Georgia facility by early 2025.
This development has been construed to be a positive for the company by investors, leading to a 13% rally in ACHR stock. Moreover, ACHR stock has been an outperformer in 2024, gaining 50% on a YTD basis.
Strategic Drivers for Archer Aviation
Archer Aviation has made significant strides in advancing its commercialization strategy, focusing on key markets and establishing partnerships that position it as a leader in the eVTOL industry. CEO Adam Goldstein has emphasized the importance of targeting markets with strong passenger demand, regulatory support, and top-tier strategic partnerships. The company has identified the United States, UAE, and Japan as its initial launch markets, with plans to roll out services in cities like New York, Los Angeles, San Francisco, and Miami. Internationally, the UAE is expected to see air taxi services by the fourth quarter of 2025, supported by collaborations with Falcon Aviation and Etihad for pilot training and maintenance. In Japan, Archer has received pre-delivery payments as part of a plan to introduce $500 million worth of Midnight eVTOLs in the region.
The company has secured partnerships with major airline carriers, including United Airlines (UAL), which has placed a $1 billion order for Archer’s Midnight aircraft, with an option to increase this by $500 million. This partnership focuses on replacing lengthy car drives with 10-20 minute flights. Additionally, Archer signed a memorandum of understanding with Southwest Airlines (LUV) to operate eVTOL aircraft at 14 California airports, aiming to reduce 90-minute car rides to 20-minute flights. Archer has also partnered with Signature Aviation, the world’s largest private aviation terminal operator, to gain access to takeoff and landing sites in major urban areas globally.
On the regulatory front, Archer has made steady progress toward commercial certification. The company achieved the FAA’s Special Airworthiness Certificate in August 2023, completed the requirements definition phase in May 2023, and received Part 135 and Part 145 certificates in the second quarter of 2024. Archer is now nearing the final phase of the FAA’s four-phase type certification process for its Midnight aircraft, which conducted its inaugural flight in October 2023.
Technologically, Archer has exceeded its goals for 2024 by completing 402 test flights this year, surpassing its target of 400. These tests have focused on transition flights for long-distance capabilities, durability assessments through increased daily flight operations, and advanced landing profile evaluations under various wind and weather conditions. The Midnight eVTOL, Archer’s flagship model, has shown promising progress, positioning it as a strong competitor in the eVTOL market.
Archer’s robust efforts in commercialization, partnerships, regulatory compliance, and technological development solidify its standing as a leader in urban air mobility. With a clear roadmap, strategic collaborations with global players like United Airlines and Signature Aviation, and its advanced Midnight aircraft, Archer is well-positioned to revolutionize urban air travel and meet its targeted launch timeline.
What Analysts Think About ACHR Stock
Analysts have attributed a rating of “Strong Buy” for the stock with a mean target price of $10.67 which denotes upside potential of about 13% from current levels. Out of 9 analysts covering the stock, 6 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating and 1 has a “Hold” rating.
