Key Points
Archer Aviation (NYSE: ACHR) has made meaningful progress over the past year. The company is advancing toward FAA certification, building out manufacturing capacity, and still expects to begin commercial operations in 2026. But there are still challenges.
Archer’s biggest challenge at the moment is that it still generates very little revenue. During the first quarter of 2026, the company clocked just $1.6 million in sales while posting an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss of $172.5 million. Management expects another adjusted EBITDA loss of $170 million to $200 million in the second quarter.
To be sure, those losses aren’t surprising for a pre-commercial aerospace company. It’s actually to be expected. The problem is that commercialization is proving slower and more expensive than many expected, and some investors are starting to grow impatient.
Fortunately, Archer ended the first quarter with approximately $1.8 billion in liquidity, giving it one of the stronger balance sheets in the electric vertical takeoff and landing (eVTOL) industry. But Wall Street expects the company to burn roughly $600 million this year and another $740 million in 2027 before free cash flow potentially turns positive later in the decade. Indeed, this is the kind of thing that can frustrate already-impatient shareholders, even if the company does boast a rather large war chest.
Certify this!
Every milestone Archer achieves still depends on regulatory approval, too. And until the FAA certifies the Midnight aircraft (the company’s all-electric air taxi), the company cannot begin large-scale commercial operations in the United States. Even if certification arrives on schedule, Archer Aviation still has to ramp up manufacturing, expand charging infrastructure, train pilots, and prove there is enough customer demand to support its business model.
Meanwhile, competition is not going gently into that good night. Rival Joby Aviation continues to make progress toward commercialization, while a handful of other aerospace companies and start-ups are pursuing the same urban air mobility market. And while Archer benefits from partnerships with some major players, including Stellantis and United Airlines, the commercial eVTOL industry remains largely unproven.
Of course, none of this means Archer is destined to fail. In fact, the company has arguably become one of the industry’s strongest players. Its manufacturing partnership with Stellantis, sizable cash position, and continued certification progress give it advantages that many of its competitors lack.
Even so, price matters. And today, investors are still paying for a business that has yet to generate meaningful commercial revenue and will likely continue consuming hundreds of millions of dollars before becoming self-sustaining. That’s a risky combination, particularly if certification timelines slip or commercialization takes longer than expected.
Ultimately, this is not a stock I would rush out to buy, even after it’s lost more than 60% of its value over the past year and trades at what some believe to be attractive levels. The truth is, until Archer demonstrates that it can transition from a development-stage company into a profitable commercial aircraft manufacturer, I’d remain on the sidelines.
And if you already own the stock, you have to decide whether it’s worth sticking it out for another year or two and hoping for the best instead of allocating that capital to much more attractive investment opportunities with far less risk and far more upside potential.
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.
