Archer Aviation's Latest Capital Raise Shows the eVTOL Pioneer Is Ready for Takeoff

Source The Motley Fool

The race to develop electric vertical takeoff and landing (eVTOL) aircraft has undergone a dramatic consolidation since its emergence around 2010. What began as a crowded field with hundreds of competing aircraft designs has been winnowed down significantly as the technical and regulatory hurdles became apparent.

However, the culling of the herd truly came down to one critical factor-capital. The immense funding requirements of developing an entirely new form of aviation, estimated in the billions of dollars per program, have proven too steep for all but the most resourceful companies.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

The hands on a close-up of a clock face read "time to buy."

Image source: Getty Images.

Archer Aviation (NYSE: ACHR), an American eVTOL leader, has excelled at fundraising since its inception, putting it in an enviable position as the industry as a whole steadily marches toward commercialization. Here's why Archer Aviation's latest funding round eliminates a key risk for investors and sets the stage for potential share price appreciation.

Securing the future

Archer's latest funding round, a $301.75 million capital raise at $8.50 per share, brings total liquidity to approximately $1 billion. This strategic financing, which included significant participation from BlackRock-managed funds, substantially fortified what was already one of the strongest balance sheets among public eVTOL companies.

At current quarterly burn rates, this war chest provides Archer with an approximately two-year operational runway. More significantly, this capital raise probably represents one of Archer's final dilutive offerings, eliminating a persistent overhang that has historically constrained the stock's valuation.

Capital strength and path to profitability

While numerous eVTOL designs have succumbed to financial constraints or been absorbed by stronger players, Archer has demonstrated remarkable capital management through multiple economic cycles. This nearly unparalleled ability to raise funds on demand has emerged as the company's defining competitive advantage in an industry where mere entry requires billions in investment.

This capital advantage has enabled Archer to maintain an aggressive path to market leadership. According to S&P Global Visible Alpha consensus data, the company is projected to become a leader in the U.S. public eVTOL market in direct aircraft revenue, reaching over $2 billion in sales by 2029.

Archer's production trajectory, scaling from 33 aircraft in 2026 to 465 units by 2030 per Alpha Vision, creates a clear path to positive cash flow by perhaps 2027. By comparison, rival Joby Aviation is projected to hit just 56 units by 2030 by Alpha Vision, highlighting Archer's ambitious production ramp-up.

Military horizons

CEO Adam Goldstein has identified defense applications as an increasingly substantial opportunity, citing mounting military interest in next-generation vertical lift capabilities. This vision recently gained powerful validation through an exclusive partnership with Anduril, one of the world's most innovative defense technology companies, to jointly develop hybrid VTOL aircraft for military applications.

The partnership combines Archer's expertise in rapid VTOL development with Anduril's deep artificial intelligence and systems integration capabilities, targeting potential Department of Defense programs. Beyond defense applications, Archer has a growing order book for civilian aircraft through multiple landmark deals, such as its joint venture with Soracle Corporation in Japan. This single deal represents an order for up to 100 Midnight aircraft.

Time to buy?

Archer's preliminary fourth-quarter 2024 non-GAAP operating expenses are tracking within management's guidance of $95 million to $110 million, showing the kind of fiscal discipline rarely seen in the capital-intensive eVTOL space. The company has also hit multiple key milestones on schedule, from FAA certification progress to the completion of its ARC manufacturing facility in Covington, Georgia.

In an industry that began with hundreds of aspirants, Archer Aviation has emerged as a preeminent force among publicly traded eVTOL companies in the U.S., distinguished by its fortress balance sheet, remarkable execution, and a clear path to market in the defense and civilian arenas. With dilution risk largely mitigated and a credible trajectory to profitability ahead, Archer appears exceptionally well positioned to reward patient investors as it advances toward transforming urban air mobility from concept to reality.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $360,040!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,374!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $570,894!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 3, 2025

George Budwell has positions in Archer Aviation, BlackRock, and Joby Aviation. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Ethereum (ETH) Underperforms All Top 5 Major Cryptos in Brutal 2025 DowntrendDespite signs of improving momentum, with RSI climbing and EMA lines hinting at a potential breakout, ETH continues to lag behind competitors like Solana in multiple metrics.
Author  Beincrypto
Apr 23, Wed
Despite signs of improving momentum, with RSI climbing and EMA lines hinting at a potential breakout, ETH continues to lag behind competitors like Solana in multiple metrics.
placeholder
Analysts Highlight 4 Reasons Why ETH Price Could Rebound Strongly in MayEthereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
Author  Beincrypto
May 07, Wed
Ethereum (ETH) has declined for five consecutive months. However, it enters May with rising optimism.
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
goTop
quote