Electric vertical take-off and landing (eVTOL) aircraft company Archer Aviation (ACHR) is seeing its shares pull back today after the stock flew too high in a recent rally. That resulted in the shares falling 23.72% during normal trading hours on Monday. ACHR stock continues this downward momentum on Tuesday with a further 3.56% drop as of this writing.
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Investors will note that this massive fall came after shares of ACHR stock underwent a major rally during November. That saw the shares climb to $9.57 before yesterday’s drop, a three-year high for Archer Aviation’s shares.
While downward movement for Archer Aviation isn’t what investors want to see, things haven’t gone completely south. Even with these drops, shares of ACHR are still up 117.26% over the last three months. Looking back even further, the stock is up 18.89% year-to-date and 12.14% over the prior 12 months.
Why the Interest in Archer Aviation?
Archer Aviation is a hot stock as it seeks to capitalize on the emerging air taxi market. That market was worth $2.3 billion in 2023, and Global Market Insights Inc. predicts it will be worth $14 billion by the end of 2032. With that growth potential on the table, it makes sense that investors have taken a shine on ACHR shares.
However, it’s not all clear skies ahead for Archer Aviation as several headwinds could hamper its business. Among these are the early nature of the air taxi business and how regulators react to it. A large caveat to the company’s potential growth includes regulatory approval for the air taxi business in the U.S. While regulators have been receptive to the market, that may not always be true.
Barclays analyst David Zazula notes ACHR’s difficulties by highlighting “persistent risk across the industry of the novel electric aircraft certification process.”
Is ACHR Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Archer Aviation is Strong Buy based on three Buy and a single Hold rating over the last three months. With that comes an average price target of $9.38, a high of $12.50, and a low of $4.50. This represents a potential upside of 28.49% for ACHR shares.
