ACHR Outperforms Industry Over the Past Month: Should You Buy the Stock?

Archer Aviation Inc.’s ACHR shares gained 25.5% in the past month, outperforming the Zacks Aerospace-Defense industry’s growth of 0.3% as well as the broader Zacks Aerospace sector’s gain of 0.7%. It also outperformed the S&P 500’s gain of 0.6% in the same time frame.

Similarly, a stellar performance can be seen in the share price return of other industry players like Lockheed Martin LMT and L3Harris Technologies LHX, which have witnessed a surge of 5.3% and 2.2%, respectively, in the past month.

With ACHR’s strong outperformance, some investors might be tempted to buy the stock immediately. However, it’s important to assess whether the company’s fundamentals can support sustained long-term growth or if the surge is only temporary. Evaluating ACHR’s growth prospects and potential risks is crucial for making an informed investment decision.

What Pushed ACHR Stock Up?

ACHR’s latest robust performance on the bourses seems to have been influenced by the following developments:

In October 2025, Archer Aviation signed an agreement with Korean Air to launch its Midnight electric vertical take-off and landing (eVTOL) aircraft in Korea, starting with government use. Per the deal, Korean Air plans to buy up to 100 Midnight aircraft. This development is expected to support ACHR’s global expansion in the urban air mobility market.

In the same month, ACHR won a competitive bid to acquire Lilium GmbH’s portfolio of around 300 advanced air mobility patents for approximately $20.9 million. This acquisition should strengthen Archer Aviation’s leadership in next-generation electric aviation.

Additionally, ACHR partnered with Cleveland Clinic Abu Dhabi to develop the first hospital-based vertiport in the United Arab Emirates. This initiative marks a significant step in integrating advanced air mobility into healthcare services and expands ACHR’s presence in the Middle East market.

Will ACHR Continue to Rise?

The global eVTOL market is projected to grow steadily as demand for urban air mobility rises and advancements in sustainable transportation continue. This trend is creating new opportunities for companies actively investing in the sector. Archer Aviation is well-positioned to benefit from this long-term expansion opportunity as commercial operations scale up and regulatory support increases worldwide.

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 ACHR’s near-term losses indicates a year-over-year improvement.

The consensus estimates for its near-term earnings made no movement over the past 60 days.

ACHR Shares Trading at a Discount

ACHR stock is trading at a discount, with its trailing 12-month Price/Book (P/B TTM) being 4.60X compared with its industry average of 6.34X.

Its industry peer, LHX, is also trading at a discount. LHX is trading at a P/B TTM of 2.82X. However, LMT is trading at a P/B TTM of 22.14X.

Long-Run Prospects Seem Shaky

While ACHR shows promising near-term prospects, its long-term growth remains uncertain. The company is working to secure certification for its Midnight jet from the Federal Aviation Administration (FAA) to begin commercial operations soon.

However, like many aerospace manufacturers, ACHR faces challenges such as supply-chain issues, rising fuel costs and a shortage of skilled labor. Any delay in obtaining FAA certification could force the company to raise additional funds and postpone revenue generation.

Since the eVTOL market is still in its early stages, ACHR’s success will depend not only on its ability to design, develop and certify its aircraft but also on how demand for eVTOL transportation grows over time. If public acceptance remains low due to concerns about safety, noise or cost, ACHR’s long-term growth potential could be limited.

What Should an Investor Do?

Investors interested in Archer Aviation may consider adopting a wait-and-watch approach for this stock due to the absence of revenues despite making steady progress through flight testing, strategic partnerships and acquisitions, as well as global expansion efforts.

Nevertheless, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering its positive performance at the bourses over the past month and its discounted valuation. 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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