Archer Aviation Is Under Pressure: Here Is What Investors Should Consider Now

Shares of Archer Aviation (NYSE: ACHR), a developer of electric vertical takeoff and landing (eVTOL) aircraft, have declined more than 30% over the past 12 months. Let's see why its stock is under pressure, and if it's smarter to buy or sell it today.

Why is Archer's stock losing altitude?

Archer's Midnight eVTOL can carry a single pilot and four passengers, travel up to 100 miles on a single charge, and reach a maximum speed of 150 miles per hour. It expects its eVTOLs to gradually replace helicopters for short-range air-taxi services, but the Federal Aviation Administration (FAA) hasn't approved their first commercial flights in the U.S. yet.

Image source: Archer Aviation.

Archer's major investors and partners include Stellantis and United Airlines, but analysts expect it to generate only $10 million in revenue in 2026 while incurring a net loss of $994 million. By comparison, they expect its rival, Joby Aviation (NYSE: JOBY), to generate $121 million in revenue and post a net loss of $869 million.

Joby generates much more revenue than Archer because its Blade air-taxi helicopter subsidiary, which it acquired last year, already serves many customers. Joby's S4 also travels farther and faster than Archer's Midnight, and it's further along in the FAA approval process.

Joby's supply chain is also tighter than Archer's because it primarily uses first-party components and aims to become a vertically integrated "transportation as a service" business that manufactures, owns, and operates its own air taxi network. Archer's goals are more modest: it's an original equipment manufacturer (OEM) that will mainly sell its aircraft to third-party fleets.

Both companies could grow significantly over the next few years. Yet Archer's weaknesses are driving investors to value it at just nine times its 2028 sales, while Joby trades at 20 times its 2028 sales. Therefore, Archer's stock probably won't take off until the FAA clears its first commercial flights and it meaningfully ramps up its eVTOL production.

Is it smarter to buy or sell the stock?

Archer's stock recently rallied after it announced its planned acquisition of Boeing's (NYSE: BA) Wisk Aero (eVTOLs), SkyGrid (automated air traffic management), and Insitu (autonomous aircraft) subsidiaries to accelerate its expansion. That deal, made on undisclosed terms, could strengthen Archer's business -- but it could also dilute its shares and increase its debt. Therefore, I wouldn't rush to buy Archer's stock right now. It has some irons in the fire, but they won't ignite more interest in its stock unless its first commercial flights are approved. For now, I think Joby -- which is pricier but has clearer catalysts -- is still a better buy than Archer.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool recommends Stellantis and Under Armour. The Motley Fool has a disclosure policy.