ACHR Advances in Commercializing Midnight Jet: Should You Buy the Stock Now?

Archer Aviation Inc. ACHR has achieved some milestones recently in association with the launch of its Midnight electric vertical take-off and landing (eVTOL) aircraft. This includes the completion of building its high-volume manufacturing facility in Georgia last month. The facility is expected to manufacture two Midnight aircraft per month by the end of 2025, with the ultimate target of manufacturing 650 jets per year by 2030. Such an initiative to firmly establish its significance as an aircraft manufacturer, particularly in terms of mass-production of the Midnight aircraft, might attract investors to add this stock to their portfolio, with eVTOL jets expected to play a major role in urban air mobility.  However, before making any hasty decision, it would be prudent to take a look at how ACHR has performed in terms of share price return over the past year, the stock’s long-term prospects as well as risks (if any) to investing in the same. This would help investors make a more insightful decision.ACHR Stock Outperforms Its Industry, Sector & S&P500Archer Aviation’s shares have surged a solid 78.1% over the past year, outperforming the Zacks Aerospace-Defense industry’s decline of 3% as well as the broader Zacks Aerospace sector’s gain of 7.5%. It also surpassed the S&P 500’s return of 23.7% in the same time frame. A similar stellar performance can be seen in the shares of other industry players like Rocket Lab USA RKLB, Embraer ERJ and RTX Corp. RTX, which have witnessed a surge of 404.9%, 121.9% and 39.4%, respectively, over the past year.ACHR 1-Year PerformanceImage Source: Zacks Investment ResearchWhat’s Been Pushing ACHR Stock Up?Archer Aviation made some significant progress in 2024 toward launching its Midnight aircraft in the commercial market. The company started the year with notable partnership agreements like a memorandum of understanding (MOU), focused on establishing sites for electric aircraft operations in the Los Angeles and New York City metropolitan areas, along with Northern California and South Florida. It also signed a Space Act Agreement with the National Aeronautics and Space Administration (NASA), focused on studying high-performance battery cells and safety testing targeted for Advanced Air Mobility and space applications. In the middle of the year, Archer Aviation received the Federal Aviation Administration (“FAA”) certificate to begin operating its Midnight aircraft commercially. In August 2024, ACHR signed an agreement with the Future Flight Global for the delivery of up to 116 of Archer’s Midnight aircraft, worth up to $580 million.  In addition, the company reported impressive results for the first three quarters of 2024. ACHR posted an earnings surprise of 20.69% in the first quarter and 14.29% in the second.  In the third quarter, the company’s earnings were in line with the Zacks Consensus Estimate. All these achievements must have boosted investors’ confidence over the past year. This might have resulted in the share price gain (mentioned above).What Lies Ahead for ACHR Stock?With increasing traffic congestion in urban cities, the demand for sustainable and low-carbon emission transport solutions is rising, which, in turn, has been boosting the market growth opportunity for eVTOL aircraft like Midnight.  To this end, it is imperative to mention that the global eVTOL aircraft market is projected to witness a CAGR of 52.0% from 2023 to 2030.Once Archer Aviation starts delivering its eVTOL aircraft to its commercial customers, we may expect the company to generate notable revenues, allowing it to earn solid gross profit and, thereby, register bottom-line growth. A sneak peek at ACHR’s near-term earnings estimates reflects the same.Upbeat Earnings Estimates for ACHRThe Zacks Consensus Estimate for fourth-quarter and full-year 2024 earnings indicates a year-over-year improvement. The consensus estimate for 2025 also mirrors a similar trend. The consensus mark for first-quarter and full-year 2025 earnings reflects an upward revision, which indicates enhanced investor confidence in this stock next year. Image Source: Zacks Investment ResearchImage Source: Zacks Investment ResearchImpressive Debt PositionCurrently, the company’s total debt to capital is 12.04%, better than the industry’s average of 55%.This indicates that ACHR is not burdened with too much debt as compared to its industry.Image Source: Zacks Investment ResearchRisks to Consider Before Choosing ACHR StockACHR has promising near-term prospects, but its long-term sustainability remains uncertain as the eVTOL market is in its infancy. In particular, the company’s success depends on its ability to design, certify, and meet evolving demand for eVTOL aircraft, while public acceptance hinges on overcoming safety, noise and affordability concerns. Without broad adoption, growth may be limited.Additionally, industry challenges such as supply-chain disruptions and a skilled labor shortage could delay project completion. A significant delay in FAA certification might require additional funding, straining timelines for revenue generation. These factors expose ACHR to operational and market risks that could impact its ability to secure a sustainable foothold in the rapidly developing eVTOL industry.What Should Investors Do?Investors interested in Archer Aviation can buy this stock now, considering the upward revision in its earnings estimates, solid share performance over the past year, impressive debt position and notable achievements in progress toward the commercial launch of its Midnight eVTOL. The company’s Zacks Rank #2 (Buy) also supports our investment thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Embraer-Empresa Brasileira de Aeronautica (ERJ): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis Report Rocket Lab USA, Inc. (RKLB): Free Stock Analysis Report Archer Aviation Inc. 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