Archer Aviation (NYSE:ACHR) shares jumped another 10% on Friday, extending a powerful 52% surge over the past five sessions as the stream of positive developments at the eVTOL start-up keeps coming.
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First, the company excited investors with its latest quarterly update, which showed that the revenue-generating stage is drawing ever nearer, with piloted flights anticipated to begin shortly. The company also remains on track to launch in the UAE before the end of the year. In the meantime, Archer’s cash position appears sound, with around $1 billion on the balance sheet.
Archer then followed that up with another investor-pleasing announcement. The company said that it has been chosen as the exclusive Air Taxi OEM for the LA28 Olympic and Paralympic Games, as well as the official and sole eVTOL sponsor for Team USA.
That’s a major win, says Cantor analyst Andres Sheppard. Not only does it elevate Archer’s visibility on a global stage, but it could also light a fire under regulators. With the FAA now under even more pressure to approve these aircraft ahead of the Olympics, this deal could prove pivotal.
As part of the agreement, Sheppard anticipates that ACHR will collaborate with various vendors to begin electrifying infrastructure in preparation for eVTOL routes ahead of the Olympics. Additionally, Archer plans to develop a vertiport network across Los Angeles, linking key locations such as the stadium in Inglewood, the Los Angeles Memorial Coliseum, LAX, Hollywood, Orange County, and Santa Monica.
In the meantime, ahead of the launch, the company is preparing to deliver its first Midnight aircraft to the UAE in the coming months. Recall, on April 23, the General Civil Aviation Authority (GCAA) gave the go-ahead to the design for a hybrid heliport in Abu Dhabi. Archer is working in partnership with Falcon Aviation to develop this helipad, with the goal of having the infrastructure up and running in the second half of the year.
Separately, Sheppard sees ACHR’s partnerships with Anduril, the Department of Defense, United Airlines, and Stellantis as “important differentiators.” These relationships are likely to support the company’s commercialization roadmap, expand its TAM (total addressable market), and aid in operational scaling and manufacturing. The company’s expansion into hybrid VTOLs is a good move as well, which Sheppard views as a strategic move to “de-risk its business.” By targeting military applications through its partnership with the Department of Defense, Archer can advance its hybrid aircraft without the need to obtain FAA Type Certification.
“Overall,” Sheppard summed up, “we remain bullish on ACHR,” as he maintained an Overweight (i.e., Buy) rating on the stock. (To watch Sheppard’s track record, click here)
Despite the Strong Buy consensus from Wall Street – based on 6 Buys and just 1 Hold – the average price target sits at $12.83. That’s now below where the stock currently trades, implying a ~4% pullback. In other words, the recent surge has outpaced analysts’ expectations, creating a disconnect between the stock’s momentum and the Street’s valuation models. That disconnect won’t last forever. Either targets will need to catch up to the stock, or the stock may cool off to meet expectations. (See ACHR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.