- Wondering whether Archer Aviation at around US$5.34 is offering value or just volatility? This breakdown is designed to help you weigh what the current price might really reflect.
- The stock has had a mixed run, with a 3.3% gain over the last 7 days, a 14.7% decline over 30 days, a 34.3% decline year to date, and a 16.6% decline over the past year, alongside a 100.8% return across 3 years and a 46.9% decline over 5 years.
- These swings sit against a backdrop where investors are closely watching Archer Aviation's progress in the emerging electric air mobility space and its ability to move projects from concept to commercialization. Headlines around funding, regulatory milestones, and partnership announcements have all contributed to shifts in how the stock's risk and potential are viewed.
- Simply Wall St currently assigns Archer Aviation a valuation score of 4/6. The next sections will walk through the key valuation checks used, and the conclusion will look at a broader way to think about what this score really means for you.
Find out why Archer Aviation's -16.6% return over the last year is lagging behind its peers.
Approach 1: Archer Aviation Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model looks at the cash Archer Aviation is expected to generate in the future and discounts those cash flows back to today using a required rate of return. The goal is to estimate what the entire stream of future cash flows is worth in today’s dollars.
For Archer Aviation, the latest twelve month free cash flow is a loss of about $672.1 million. Analyst and model projections used here point to further free cash flow losses through 2029, before moving to a projected free cash flow of $380.0 million in 2030. Estimates beyond the analyst horizon are extrapolated by Simply Wall St based on the earlier cash flow path.
Putting these projections into a 2 Stage Free Cash Flow to Equity model results in an estimated intrinsic value of about $28.34 per share. Compared with a recent share price around $5.34, the model implies the stock is about 81.2% undervalued on these assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Archer Aviation is undervalued by 81.2%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.
Approach 2: Archer Aviation Price vs Book
For companies that are still building toward consistent profitability, price based on book value can be a useful anchor, because it compares what you pay per share with the net assets backing the business.
In general, higher growth expectations and lower perceived risk can justify paying a higher valuation multiple, while slower growth or higher execution and funding risks can point to a lower, more conservative range.
Archer Aviation currently trades on a P/B ratio of about 1.80x. This sits below the Aerospace & Defense industry average P/B of around 4.13x and below the peer group average of roughly 3.30x. This suggests the market is assigning a lower value to each dollar of book equity compared with these reference points.
Simply Wall St also uses a proprietary “Fair Ratio” for P/B, which estimates what a reasonable multiple could be once factors such as earnings growth profile, industry, profit margins, market cap and specific risks are taken into account. This tends to be more tailored than a simple comparison with peers or the industry, because it adjusts for the company’s own characteristics rather than assuming all businesses deserve the same multiple.
On this basis, Archer Aviation’s current P/B of 1.80x is being compared with a Fair Ratio that is not available in this dataset. As a result, a firm conclusion on mispricing cannot be drawn from the Fair Ratio framework alone.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your Archer Aviation Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as simple story based forecasts where you set your view of Archer Aviation’s future revenue, earnings and margins, link that story to a financial model and fair value, then compare that fair value with today’s price on Simply Wall St’s Community page. Each Narrative updates as new news or earnings arrive. This is why one Archer investor currently sees Archer as worth about US$16.32 per share while another assigns a fair value of US$4.50. This gives you a clear sense of how different views on certification timing, urban air mobility adoption and defense or software revenues translate into very different ideas of when the stock looks attractive or expensive for their own goals.
For Archer Aviation however we'll make it really easy for you with previews of two leading Archer Aviation Narratives:
Fair value in this bullish narrative: US$18.00 per share.
Implied undervaluation versus the recent US$5.34 price: about 70%.
Revenue growth assumption: very large annual increase from the current base.
- Sees FAA certification progress, programs such as the eVTOL Integration Pilot Program, and a target presence at the 2028 Los Angeles Olympics as key steps toward moving Midnight from development into commercial service.
- Builds in sizable long term potential from airline and sovereign order interest, hybrid VTOL defense work with partners like Anduril, and aviation software collaborations with companies such as Palantir, NVIDIA and Starlink.
- Assumes that by 2029 Archer Aviation could reach US$868.1m of revenue and US$73.8m of earnings and supports a bullish analyst price target of US$18.00, while clearly outlining certification, execution, adoption and geopolitical risks that could challenge this view.
Fair value in this cautious narrative: not specified, treated here as lower than the current share price.
Implied overvaluation versus the recent US$5.34 price: framed as a concern that enthusiasm and ETF interest may be running ahead of fundamentals.
Revenue growth reference: 108% used as an input for this narrative's assumptions.
- Highlights that Archer Aviation has been described as both overlooked and crowded, with year to date share price moves and past media attention drawing in ETF flows and short term traders.
- Points to fixed term Department of Defense contracts as important but not necessarily enough on their own to settle questions around valuation and share price swings.
- Flags mixed technical signals and the risk that investors may place too much weight on near term contract headlines or quarterly updates when thinking about the stock's longer term risk and reward profile.
These two Archer Aviation Narratives sit within a wider set of 5 community views, split between 3 that see the stock as undervalued and 2 that see it as overvalued, which gives you a useful range of assumptions to test against your own expectations before making any decisions.
See what the community is saying about Archer Aviation
Do you think there's more to the story for Archer Aviation? Head over to our Community to see what others are saying!
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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