Archer Aviation Stock Hits a New 52-Week Low. Is Now the Time to Buy?

On Monday, Archer Aviation (NYSE: ACHR) stock fell to a new 52-week low. It has declined by nearly 40% since the start of the year, and it's now down close to 70% from its high of $14.62. It was a hot buy a few years ago, but the excitement around the electric vertical take-off and landing (eVTOL) stock has cooled off significantly.

However, for long-term investors, could this prove to be a blessing in disguise? Could now be an opportune time to buy low on Archer and just hang on for the long haul?

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The eVTOL market holds a lot of promise

Air taxis have the potential to revolutionize the way people commute and travel on a day-to-day basis. That's the hope, anyway. And analysts at Grand View Research believe that by the end of the decade, the global eVTOL aircraft market could be worth around $28.6 billion. That would be an astounding rate of increase from the merely $2.1 billion they expect it to be worth this year.

The industry remains in its early growth stages, and Archer is one of the companies that hopes to be among the first to have an approved eVTOL aircraft in the skies. It's also the official air taxi provider for the upcoming Olympics in Los Angeles in 2028, in what could be Archer's big coming-out party.

Is Archer's stock worth buying right now?

At the end of the day, Archer is a risky stock to invest in. The company hasn't commenced its core operations, and it could take a long time before it turns a profit. Furthermore, its cash burn may accelerate as it scales its operations, assuming, of course, its air taxis obtain approval from regulators. In just the trailing 12 months, the company has incurred a net loss of around $743 million.

Archer could make for a compelling buy if you're willing to take on the risk that comes with doing so, because if the eVTOL market takes off and Archer is a big player in it, then its valuation could grow considerably. But without even an approval to hang its hat on right now, there's still a ton of risk with the stock.

This is a highly speculative investment, and investors should treat it as such. It may have a lot of upside, but it can also go far lower in value if things don't go as planned. If you're buying Archer's stock, you may want to keep a close eye on it.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.