Archer Aviation Proceeds in Midnight Launch: What Should Investors Do?

Archer Aviation Inc. (ACHR) is moving closer to making electric air taxis a reality. Its main aircraft, Midnight, is making notable progress as the company prepares for its commercial launch soon.

In early July 2025, ACHR completed its first flight of the Midnight aircraft in Abu Dhabi, reaching a significant milestone for its planned commercial deployment in the UAE and expanding its operations in the Middle East.

As urban traffic increases and cities look for better transport options, investor interest in the electric vertical takeoff and landing (eVTOL) space is rising.

With Archer Aviation positioning itself as a prominent front-runner in the growing eVTOL market through key partnerships and milestone achievements, regulatory progress and global expansion plans, next-gen aerospace investors may consider buying this stock. However, before making a decision, let’s take a look at the stock’s performance, growth opportunities, valuation and possible risks, to make a more informed decision.

ACHR Stock Outperforms Its Industry, Sector & S&P500

Archer Aviation’s shares have surged a solid 113.4% in the past year, outperforming the Zacks Aerospace-Defense industry’s growth of 19.6% and the broader Zacks Aerospace sector’s gain of 26.8%. It has also surpassed the S&P 500’s return of 11.6% in the same time frame.

A similar stellar one-year performance can be seen for other industry players, such as Joby Aviation (JOBY) and Embraer (ERJ), which are also involved in the eVTOL market. Notably, shares of ERJ have surged a solid 85.4%, while those of JOBY rose 86.5% in the past year.

Tailwinds Driving Archer Aviation

Archer Aviation continues to build momentum through strong government and commercial partnerships. In June 2025, the company signed an agreement with Indonesia’s PT. IKN to introduce its Midnight aircraft as part of the country’s smart city plans. This makes Indonesia the third country, after the UAE and Ethiopia, to be included in Archer Aviation’s Launch Edition program, which aims to begin commercial services internationally ahead of full certification in the United States.

In the same month, Archer Aviation partnered with Jetex, a global leader in private aviation services, to develop infrastructure across Jetex’s terminal network for supporting upcoming air taxi services with the Midnight aircraft.

In June, Archer Aviation joined a five-nation regulatory alliance involving the United States, UK, Australia, Canada and New Zealand. The goal is to streamline global certification processes for eVTOL aircraft, which could speed up Archer Aviation’s entry into international markets once it secures FAA approval. These steps show the company’s commitment to achieving global reach and preparing for large-scale commercial rollout, which, in turn, must have boosted its share price.

What Lies Ahead for Archer Aviation?

As increasing demand for urban air mobility, along with growing technological advancements in sustainable transportation solutions, continues to bolster the growth prospects for the global eVTOL market, industry players like ACHR, JOBY and ERJ stand to gain substantially in the coming years.

To this end, the Mordor Intelligence firm estimates that the global urban air mobility market will witness a compound annual growth rate of 19.2% during the 2025-2040 time period.

Such market growth trends bolster Archer Aviation’s prospects, especially once its Midnight jets become commercially available in the open market.

Let’s take a sneak peek at ACHR’s near-term earnings estimates to check if they also reflect the same.

Earnings Estimates for ACHR

The Zacks Consensus Estimate for second-quarter, third-quarter and full-year 2025 earnings indicates a year-over-year improvement. The consensus estimate for 2026, however, indicates a decline.

The consensus mark for its near-term earnings implies an upward revision over the past 60 days, indicating enhanced investor confidence in the stock’s earnings growth capabilities.

ACHR Shares Trading at a Discount

ACHR stock is trading at a discount, with its trailing 12-month Price/Book (P/B TTM) being 5.85X compared with its industry average of 5.99X.

Its industry peer, ERJ, is also trading at a discount. ERJ is trading at a P/B TTM of 2.89X. However, JOBY is trading at a P/B TTM of 11.36X.

Risks to Watch

While Archer Aviation shows promise in the short term, its long-term success is still uncertain. The eVTOL industry is in its early stages and thus ACHR’s ability to design, certify and scale production efficiently depends on the industry’s maturity and how demand for eVTOL evolves over time. Concerns about safety, noise and affordability may delay public acceptance and slow down demand.

Another concern is that Archer Aviation has not yet started generating revenues. Until it begins commercial operations and builds a strong customer base, its ability to create long-term value remains unclear. The company has a negative Return on Invested Capital (ROIC), which is also below the industry average. This suggests that it is not yet using its capital effectively to drive returns.

ACHR’s industry peer, JOBY, also holds a negative ROIC. However, another of ACHR’s industry peers, ERJ, boasts a positive ROIC of 14.24, which is also higher than the industry’s level.

What Should an Investor Do?

Archer Aviation has made steady progress through flight testing, strategic partnerships and global expansion efforts. However, the absence of revenues and a negative ROIC might raise concerns for long-term investors. Given these factors, investors may prefer to wait and watch before making a decision.

Nevertheless, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering its stellar performance at the bourses in the past year, discounted valuation and upward revision in earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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