The Archer Aviation (NYSE:ACHR) stock outlook suggests the company is flying in a holding pattern. After more than tripling in value in 2023, the electric vertical takeoff and landing aircraft manufacturer is down 11% so far this year. The stock traded between $5 and $5.50 per share over the last six weeks. That could change on Feb. 26 when Archer reports fourth quarter and full-year 2023 results.
There is good reason to believe ACHR stock could achieve vertical liftoff after the readout. With several new, positive developments in its cap, the market may handsomely reward the eVTOL leader.
An ACHR Stock Outlook
Archer continues advancing its progress towards commercialization but also has plans for broader capabilities. Last quarter it received a $1 million payment from the U.S. Air Force as it delivered a simulation aircraft for testing. It was the first installment of what is a $142 million contract and we should get an update on the Defense Dept.’s progress with the craft.
Last month the eVTOL maker announced the National Aeronautics & Space Administration developed a keen interest in Archer’s lithium-ion battery cell technology. Because the batteries in the aircraft are like those used in electric vehicles, Archer has no room for error.
We have all seen video of EVs catching on fire because of battery failure. Archer can’t allow battery failure in the air. The collaboration with NASA will study the safety of Archer’s technology and success will validate eVTOL air travel as a safe and viable option.
Federal Aviation Administration certification is the real key to Archer’s success. There are several hurdles all eVTOL developers must jump through before gaining the FAA’s stamp of approval for launching a commercial operation.
Archer announced last week it is building three Midnight aircraft that conform to the oversight agency’s for-credit piloted flight tests. The first plane will be completed within the next few weeks and will enter the FAA’s testing phase later this year.
Commercialization Coming
The combination of developments are pushing Archer Aviation closer to its goal of launching a commercial operation next year. We should hear just how far the eVTOL stock is to realizing that potential on Feb. 26.
The stakes are high because this is a massive opportunity. Archer is one of the leading players creating an industry out of nothing. Adjacent industries are watching closely. They are also investing in Archer.
United Airlines (NASDAQ:UAL) partnered with the eVTOL maker as it wants to use the aircraft to transport passengers from Newark Liberty International Airport to Manhattan in 10 minutes rather than the 90 minute trip it could take by car.
Automaker Stellantis (NYSE:STLA) is helping Archer build out a manufacturing complex in the United Arab Emirates.
The Middle East is shaping up to be a hotbed of activity for electric vehicles. Government-sponsored investment pools are backing both four-wheeled EVs as well as ones in the air. The UAE invested over $3 billion into Chinese EV maker Nio (NYSE:NIO) while Saudi Arabia is betting on Lucid Motors (NASDAQ:LCID).
The UAE says as soon as Archer gets FAA flight approval it will simultaneously approve its business launch there.
Clock Is Ticking
The end of the month promises to be an exciting time for Archer Aviation. Although the ACHR stock outlook suggest it remains an investment only for risk-tolerant investors it has every chance to succeed. Investing guru Cathie Wood believes the eVTOL stock is ready for takeoff. She has been buying handfuls of ACHR stock and owns 22.7 million shares.
The company has worked years to develop the technical know-how to advance the airborne urban mobility business to reality.
Now with well-financed backers pushing it across the finish line and government agencies taking an interest in the technology, Archer Aviation is a business ready to take flight. It just might start at the end of February.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
