Prediction: Here's What a $1,000 Investment in Archer Aviation Will Be Worth by 2030

Archer Aviation (NYSE: ACHR), a developer of electric vertical take-off and landing (eVTOL) aircraft, went public through a merger with a special purpose acquisition company (SPAC) on Sept. 16, 2021. Its stock opened at $9.90 per share the following day, but now trades at less than $4 per share. Let's see why Archer's stock fell -- and where it might be in 2030.

Image source: Archer Aviation.

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Why didn't Archer Aviation's stock take off?

Archer's Midnight eVTOL carries a single pilot and four passengers, travels up to 100 miles on a single charge, and reaches a maximum speed of 150 miles per hour. It expects its eVTOLs to eventually replace helicopters for short-range flights because they're greener, quieter, and easier to land in densely populated urban areas.

Archer's biggest backers include Stellantis (NYSE: STLA), which plans to help it mass-produce its eVTOLs, and United Airlines (NYSE: UA), which intends to use its aircraft for airport-to-home flight services. It plans to sell its aircraft to other commercial airlines and government customers, and it's building its own first-party air mobility service.

However, the Federal Aviation Administration (FAA) hasn't approved Archer's first commercial flights yet. Moreover, Archer is trailing its top competitor, Joby Aviation (NYSE: JOBY), in the FAA's multi-stage certification process. Joby's S4 is also faster and more power-efficient than Archer's Midnight, and Joby uses more in-house components than Archer.

Those unfavorable comparisons -- along with its lack of near-term commercial revenue, ongoing losses, and high valuations -- weighed down Archer's stock over the past five years. It's also locked in trade secret and patent lawsuits with Joby and Vertical Aerospace.

Where will Archer's stock be in 2030?

From 2025 to 2028, analysts expect Archer's revenue to rise from less than $1 million to $507 million. With a market cap of $3 billion, it trades at six times its 2028 sales. That rosy outlook assumes the company achieves FAA certification, ramps up its production with Stellantis, starts converting its multi-billion-dollar backlog into revenue, and resolves its legal disputes.

If Archer matches analysts' estimates through 2028, grows its revenue at a 20% CAGR through 2030, and trades at ten times its current year's sales by the final year, its market cap could rise nearly fivefold to $14.6 billion by the end of the decade. Therefore, Archer is still a potential multibagger -- but it could sink a lot lower if it misses any of its near-term goals.

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