Time to Sound the Alarm on Archer Aviation?

Archer Aviation (NYSE: ACHR), an early mover in the nascent market for electric vertical takeoff-and-landing (eVTOL) aircraft, set a record high of $17.14 per share on Feb. 18, 2021. Today, it trades at less than $5. Is it time to sound the alarm on this fallen stock?

Why did Archer Aviation's stock crash?

Before Archer went public through a merger with a special purpose acquisition company (SPAC), it claimed it could produce 10 eVTOLs in 2024 and 250 eVTOLs in 2025. But as of this writing, it has only manufactured two test aircraft and one full-scale Midnight aircraft.

Image source: Archer Aviation.

The Midnight can carry a single pilot and four passengers, travel up to 100 miles, and reach a maximum speed of 150 miles per hour. However, it has a lower top speed and a shorter range than Joby Aviation's (NYSE: JOBY) S4 eVTOL. Joby is also further along in the FAA certification process for its U.S. commercial flights than Archer.

Those setbacks -- along with its lack of meaningful revenue, steep losses, and high valuation -- make Archer a less appealing eVTOL stock than Joby. However, Archer's indicative (non-committal) backlog still swelled to $6 billion at the end of 2025 with pending orders for roughly 1,200 aircraft. Its biggest investor, Stellantis, still plans to help the company ramp up its production after the FAA fully certifies its first commercial flights.

Archer's early customers include United Airlines and Abu Dhabi Aviation, which will use the Midnight for last-mile "airport to home" air taxi flights, and Andruil, which has been co-developing a hybrid eVTOL defense aircraft with the company. Archer believes it can eventually produce 650 aircraft annually with Stellantis after the FAA greenlights its first flights.

Unlike Joby, which will mainly sell its own first-party eVTOLs, Archer plans to produce eVTOLs for third-party customers. Both companies will launch their own first-party air taxi services, but Uber will directly integrate Joby's flights into its Uber Air platform.

It's too early to sound the alarm

Archer's progress is sluggish, and it has clear disadvantages against Joby. But from 2026 to 2028, analysts expect its revenue to rise from $9.5 million to $428.4 million as it ramps up its production. With a market cap of $3.6 billion, it still looks reasonably valued at 7 times its 2028 sales. Joby, with a market cap of $8.5 billion, looks pricier at 19 times its 2028 sales.

Archer's stock probably won't rally until the FAA fully certifies its first commercial flights, but its downside should be limited. Rather than sounding the alarm and declaring it's time to sell, it's probably better to wait and see if it can deliver more eVTOLs over the next few years.

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