Archer Aviation (ACHR): Evaluating Valuation After Olympic Deal, New Funding, and Certification Progress

If you have been following Archer Aviation (ACHR) lately, you have probably noticed some headline-grabbing moves. The latest news is that the company just appeared at the Deutsche Bank 15th Annual Aviation Forum after securing $850 million in new funding and announcing progress toward FAA certification. In addition, Archer has landed a high-profile contract as the Official Air Taxi Provider for the LA 2028 Olympic Games, which has drawn attention to its growing commercial ambitions and the credibility of its industry partnerships.

Despite these updates, Archer Aviation’s shares are down 14% over the past month, following an even steeper slide during the past 3 months. However, when you look at a longer time frame, the stock is still up 159% over the past year. This pattern suggests shifting risk perceptions as the company transitions from a concept to an actual operator in urban air mobility, particularly with names like United Airlines and Stellantis supporting their momentum. Investors appear to be weighing the promise of future growth against short-term uncertainty, particularly with the business still pre-revenue and reporting persistent losses.

With all these developments reflected in recent volatility, the question remains: is Archer Aviation now a smart entry point, or is future upside already priced into the stock?

Price-to-Book of 3.3x: Is it justified?

On a price-to-book basis, Archer Aviation appears attractively valued compared to both its peers and the broader Aerospace & Defense industry. The company trades at a price-to-book ratio of 3.3x, which is notably lower than the peer average of 8.9x and slightly below the industry average of 3.4x.

The price-to-book ratio compares a company’s market value to its book value, offering a snapshot of how investors are weighing current assets and potential against the stock price. For an early-stage, high-growth company like Archer with little to no current revenue and ongoing losses, this multiple gives investors a lens to gauge investor enthusiasm or skepticism relative to its asset base and future potential.

Given Archer's robust growth projections and industry partnerships but persistent unprofitability, the market seems cautious about pricing in too much optimism. The current multiple reflects a discount to peers, possibly signaling skepticism around short-term profitability as the company scales up.

Result: Fair Value of $30.22 (UNDERVALUED)

See our latest analysis for Archer Aviation.

However, persistent net losses and the absence of current revenue still present key risks. These factors could stall investor enthusiasm for Archer's growth story.

Find out about the key risks to this Archer Aviation narrative.

Another View: What Does the DCF Model Say?

While the book value approach suggests Archer Aviation is undervalued, our DCF model offers a second opinion by focusing on future cash flows instead of current assets. It also finds the shares looking undervalued. However, does it capture all the risks ahead?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Archer Aviation to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Archer Aviation Narrative

If you would rather run the numbers yourself or want to shape your own view, you can create your narrative and see how your outlook compares in just a few minutes. Do it your way

A great starting point for your Archer Aviation research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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