Archer Aviation ( ACHR, Financial) witnessed a significant correction in its stock of about 26% in the past two days after gaining 148% in the previous two months. However, this hiccup does not make Archer cease to be an interesting growth stock in the nascent air taxi space.
The firm, which is targeting the example of urban air mobility and thinking of starting the flying-taxi service in Los Angeles by 2026, is realizing its role in providing efficient transportation and emission decrease. Looking to Stellantis for support, Archer is working on its "Midnight" eVTOL aircraft, currently with a $6bn order book for 650 aircraft per year by 2030. Nevertheless, future investment may be risky if there is a conflict of interest regarding Stellantis CEO Carlos Tavares' resignation amid citing a steady increase in competition.
Archer commenced Q3 with $502m in cash and posted $115m in losses for the terminal quarter. This means that a share dilution issue could occur if the company requires more financing. The company aims to achieve FAA certification by 2025, but Archer's timeline is vital, with the UAE possibly launching the first air taxi routes before the United States.
Potential buyers interested in this stock should exercise caution, given the risks of short-term fluctuations in the stock that the regulatory environment could occasion. Nevertheless, the company's relationship with other firms and the new product launch may still increase investors' attention to the company.
