Archer Aviation Proposes New York Air-Taxi Network: Buy the Stock Now?

Archer Aviation Inc. ACHR recently announced its plan to launch an air taxi network in New York City in partnership with United Airlines. The initiative is aimed at revolutionizing urban mobility by offering 5-15-minute flights from Manhattan to nearby airports via Midnight, Archer’s electric vertical takeoff and landing (eVTOL) aircraft. 

This strategic push into a high-traffic metro area showcases Archer's efforts to further strengthen its footprint in the urban air mobility market, which might attract investors looking for sustainable transport systems to buy this stock. 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&P500

Archer Aviation’s shares have surged a solid 78.1% over the past year, outperforming the Zacks Aerospace-Defense industry’s rise of 1.8% as well as the broader Zacks Aerospace sector’s gain of 5.5%. It also surpassed the S&P 500’s return of 4.6% in the same time frame.

A similar stellar performance has been delivered by other industry players like Rocket Lab USA RKLB and Embraer ERJ, whose shares have surged 406.8% and 73.3%, respectively, over the past year.

What’s Been Pushing ACHR Stock Higher?

Over the past year, Archer Aviation has achieved a few milestones, accelerating its progress toward successfully bringing its Midnight eVTOL aircraft into the commercial market and taking the company to the next level of revenue generation. ACHR has also clinched a few significant agreements, which have further solidified its position in the expanding aerospace market.

In March 2025, signed an agreement with Ethiopian Airlines, making it the second customer planning to deploy its Midnight jet under the “Launch Edition” program. Following this agreement, these two companies aim to work together to bring an all-electric air taxi network to the region using Archer’s Midnight aircraft.

In March, Archer Aviation and Palantir Technologies announced a partnership, with the aim to build the AI foundation for the future of next-generation aviation technologies. Through this partnership, these two companies aim to accelerate the scaling of Archer’s aircraft manufacturing capabilities at its facilities in Georgia and Silicon Valley. The idea is to advance the development of software solutions to drive innovation across the entire value chain.

In February, the company announced a “Launch Edition” commercialization program for its Midnight aircraft, with Abu Dhabi Aviation (ADA) becoming its first Launch Edition customer. 

These accomplishments must have boosted investors’ confidence in this stock, which was duly reflected in its price performance at the bourses last year.

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 electric vertical take-off and landing (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 55% from 2025 to 2034 (as predicted by the Precedence Research firm).

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 long-term bottom-line growth. 

A sneak peek at ACHR’s near-term earnings estimates reflects the same.

Earnings Estimates for ACHR

The Zacks Consensus Estimate for first-quarter and full-year 2025 earnings indicates a year-over-year improvement. The consensus estimate for 2026 also mirrors a similar trend.

However, the consensus mark for first-quarter and full-year 2025 earnings reflects a downward revision. This indicates declining investor confidence in this stock’s earnings growth capabilities.

Risks to Consider Before Choosing ACHR Stock

ACHR offers promising near-term prospects, but whether its business will be sustainable in the long run remains uncertain. This is because the eVTOL aircraft market is still in its early stages, and ACHR's success depends not only on its ability to design, develop and certify eVTOL aircraft but also on how the demand for these vehicles evolves. 

Public acceptance of eVTOLs as an alternative to traditional transport methods could face hurdles related to safety, noise and affordability concerns. Without widespread recognition, ACHR's growth potential may be constrained.

The company is yet to generate revenues, which might also be a cause of concern for its investors. It might not be able to offer attractive returns to its shareholders unless it makes a profit from its own business. Its negative Return on Invested Capital (“ROIC”), which also lags the industry, further justifies that.

What Should an Investor Do?

Investors interested in Archer Aviation stock should wait for a better entry point, considering its negative ROIC and a downward revision in near-term earnings estimate.  

However, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, taking into account the stellar performance of its shares over the past year and year-over-year improvement reflected by its 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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