In the world of flying car stocks, also known as electric vertical takeoff and landing (eVTOL) aircraft, Archer Aviation (NYSE:ACHR) remains among the most-watched companies. This year has been a bumpy one for investors in this stock. Today’s move, which sees ACHR stock down a little more than 2%, appears to highlight some consolidation in these key high-potential names after an impressive 2023.
Interestingly, today’s move comes a day after Archer reported its fourth-quarter earnings and released its outlook for the first quarter. Archer also reported that it’s in the final phase of certification for the company’s Midnight aircraft. The new eVTOL is expected to receive final approval by 2025.
Considering this news, I was surprised to see ACHR stock down today. However, let’s dive into why that may be the case and what investors may want to pay attention to for this company.
Why Is ACHR Stock Down Today Following Earnings?
Archer’s recent earnings report likely didn’t matter much to most investors. That’s because the company is currently preparing for production and incurring costs in its pre-revenue stage. However, the company’s liquidity position of around $625 million in cash and expected quarterly operating expenses of between $100-$120 million moving forward are a bright spot. At this rate, the company has around six quarters of capital left to get its planes in the air and sold, making the company’s 2025 certification timeline work.
Additionally, the company noted that it is now in its final certification phase for Archer’s flagship Midnight aircraft. Archer’s CEO Adam Goldstein noted in a shareholder letter that “[w]ith the vast majority of the aircraft’s subsystems and components being sourced from leading aerospace suppliers with certification heritage we have a significantly de-risked path to certification from here.” That’s something investors concerned about potential hiccups will like to see.
Now, it’s worth noting that things need to proceed according to plan in order for Archer to be able to build and sell these eVTOL aircraft. Plenty could go wrong, and we’re still roughly a year away from seeing certification and sales flow through.
That said, I do think this is a compelling space for investors to focus on, and I view the company’s recent earnings and forward outlook as a net positive. The stock’s decline today is intriguing, and I think growth investors may want to take a look at this stock on this move.
On the date of publication, Chris MacDonald did not have (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.
