Archer Aviation to Join eVTOL Pilot Program: How to Play the Stock?

Archer Aviation Inc. (ACHR) recently revealed its plans to join the new White House’s electric vertical takeoff and landing (eVTOL) Integration Pilot Program (eIPP), initially outlined in June 2025 as part of Trump’s Executive Order - “Unleashing American Drone Dominance”. The program will allow for trial operations of Archer's Midnight aircraft. The goal is to demonstrate that air taxis are safe, quiet, and scalable, building community support for the new technology.

As part of the eIPP, Archer aims to work with United Airlines and other U.S. carriers, as well as cities interested in planning and conducting trial operations for its Midnight eVTOL.

This program could benefit Archer Aviation by providing a clear pathway to demonstrate its technology and build public trust, with the recent announcement enticing investors to add this stock to their portfolios right away.

However, before buying a stock based on a single event, a prudent investor should also consider the company's broader growth potential, its performance in the markets, and operational challenges (if any). Let's discuss these factors below.

ACHR Stock’s YTD-Month Performance

Archer’s shares have lost 6.6% in the year-to-date period, underperforming the Zacks Aerospace-Defense industry’s growth of 28.7% and the broader Zacks Aerospace sector’s gain of 28.4%. It has also underperformed the S&P 500’s return of 13.5% in the same time frame.

On the contrary, a stellar performance can be seen from other industry players (in the past six months), such as Joby Aviation (JOBY) and Embraer (ERJ), which are also involved in the eVTOL market. Notably, shares of ERJ have surged a solid 55.7%, while those of JOBY rallied 77% in the said time frame.

What Caused ACHR Stock to Fall?

Multiple factors played their part in bringing down Archer Aviation at the bourses in recent times.

In May 2025, short-seller Culper Research accused Archer Aviation of "systematically misleading" investors about key development and testing milestones for its Midnight eVTOL aircraft, per a MarketBeat report, as cited in an article by Investing.com. Although ACHR swiftly denied this report, labelling these allegations as baseless, investors might have gotten worried, which was duly reflected in the resultant share price loss.

Moreover, the company’s shares suffered a major setback this July, losing almost 11% in a single trading session, after a judge ruled that a lawsuit against the company can move forward (as reported by Motley Fool).

As per this report, a shareholder lawsuit against the company alleges that when it went public through a special purpose acquisition company (SPAC) merger, its investor, Ken Moelis, misrepresented the value of shares and misled investors about the true progress of its aircraft development. Naturally, a judge’s decision to allow the lawsuit to move forward hurt investors’ confidence in ACHR stock, as they may have felt that the company’s publicly stated achievements were not entirely accurate.

Recently, the company registered lower-than-expected bottom-line figures in its second quarter 2025 results that might have added to investors’ skepticism surrounding this stock.

Will ACHR Rebound?

Growing urban traffic congestion is increasing the demand for sustainable, low-emission transportation. This trend is fueling the global urban air mobility market, which is expected to witness a compound annual growth rate of 19.2% during the 2025-2040 period, as per the Morder Intelligence firm.

So, once Archer begins delivering its Midnight aircraft to customers, it is poised to benefit from this market growth with strong revenue and bottom-line expansion.

However, one must not forget that the eVTOL industry itself is in a nascent stage and thus Archer Aviation’s ability to design, certify and scale production will depend on how quickly the industry develops and how strong the demand for eVTOL aircraft becomes. Safety, noise and affordability concerns could also slow down public acceptance and limit demand.

Moreover, Archer has not yet started generating revenues. Until the company begins commercial flights and builds a solid customer base, it will be difficult to measure its long-term value.

Let’s take a sneak peek at ACHR’s near-term earnings estimates to check what they reflect.

Earnings Estimates for ACHR

The Zacks Consensus Estimate for ACHR’s near-term earnings indicates a year-over-year improvement.

The consensus mark for its near-term earnings implies no movement over the past 60 days, except for 2025. This suggests that analysts are not very confident 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 3.47X compared with its industry average of 6.36X.

Its industry peer, ERJ, is also trading at a discount. ERJ is trading at a P/B TTM of 2.91X. However, JOBY is trading at a P/B TTM of 13.63X.

Poor ROIC

Archer has a negative Return on Invested Capital (ROIC), which means it is not yet using its funds effectively to generate returns. Its ROIC also remains poor when compared to that of its industry.

What Should an Investor Do?

Investors interested in Archer may consider divesting this stock from their portfolio, given its poor performance on the bourses and a negative ROIC despite a discounted valuation. Its VGM score of F also does not favor investing in this stock.

ACHR has a Zacks Rank #4 (Sell) at present.

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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