Archer Aviation (NYSE:ACHR) has been soaring sky-high over the last few weeks, with share prices jumping up some 250% since early November. The blistering rally was driven by a number of factors, including the vertical take-off and landing (VTOL) aircraft maker’s continued progress towards FAA certification, deals with both the UAE and Japan Airlines, and an order book worth more than $6 billion.
Don't Miss Our New Year's Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
In addition, earlier this month, Archer launched its Archer Defense program, teaming up with Anduril, a weapons manufacturer, to create a hybrid-powered VTOL that will be used for defense applications. CEO Adam Goldstein has expressed his hopes that the new venture will mesh with the new Elon Musk-headed “DOGE framework,” potentially providing additional avenues for revenues during the upcoming Trump administration.
Meanwhile, the company has announced its intentions to use 2025 to continue ramping up towards commercialization of its air taxi services in both the U.S. and international markets.
Though overall high on ACHR’s prospects, one top investor known by the pseudonym Stone Fox Capital–who sits in the top 4% of TipRanks’ stock pros—expects the runway towards commercialization to have some potholes.
“The key investor takeaway is that investors should let the stock cool off after a major hot streak with several exciting announcements,” writes the 5-star investor. “The biggest risk now is aircraft certification delays.”
Stone Fox is quite satisfied with the developments from the past few months, with the recent deals giving ACHR quite the backlog of orders on its books. Therein lies the rub, however, as the path forward towards realizing these gains could run into some turbulence.
“The FAA certification process or entry into the UAE could easily face some normal delays and investor confidence could take a hit,” notes the investor, who also adds that potential manufacturing hiccups at ACHR’s production facility should also be taken into account.
Though exceptionally bullish on ACHR, Stone Fox believes that the recent rally has now made the stock priced for perfection. That being said, Stone Fox will be staying alert for any signs of weakness, while urging investors to “pounce” on any such opportunities. The investor is therefore giving ACHR a Hold (i.e. Neutral) rating. (To watch Stone Fox Capital’s track record, click here)
Wall Street seems to be pretty satisfied with ACHR. With 6 Buy and 1 Hold ratings, ACHR enjoys a Strong Buy consensus rating. Its 12-month average price target of $11.29 would be rangebound, however, signifying that even these bulls don’t see much upside in the year to come. (See ACHR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
