Where is Archer Airlines in 3 years?

Flying taxis are expected to change city travel, and Archer Aviation (NYSE: ACHR) At the forefront. Archer has developed cutting-edge electric vertical takeoff and takeoff vehicles (EVTOLS) or flight taxis and plans to launch its services in the United Arab Emirates early this year.

Archer is working to certify and improve its manufacturing capabilities in the United States. It also has partnerships with cities and airlines to ensure its flying taxi service takes flights. The technology is still in its early stages and the next few years will be crucial to its success. This is Archer Aviation for the next three years.

Image source: Archer Aviation.

Archer Aviation's air taxi business has made good progress. Last year, the company completed construction at its 400,000-square-foot manufacturing plant in Covington, Georgia, and plans to build 10 midnight aircraft this year.

With the help of Abu Dhabi Airlines, Archer plans to open its air taxi service in the United Arab Emirates later this year. It also plans to deploy its small fleet of midnight aircraft to early adopters like the UAE over the next 18 to 24 months.

Archer has obtained the design approval for the first hybrid helicopter in the UAE. General Civil Aviation Authority has approved the design to help transform Abu Dhabi cruise terminal helicopters into hybrid helicopters for helicopters and EVTOL aircraft. Once completed, this will be the first hybrid helicopter rack for early commercial and taxi operations in Abu Dhabi.

Archer hopes that the UAE operations are just the beginning. The company has set its sights on the U.S. market in the next few years. For example, the company hopes to start operating in New York City and releases its vision for air taxi services in April. and United AirlinesArcher plans to allow passengers to travel from Manhattan to nearby airports in just five to 15 minutes using a midnight flight.

"With its existing helicopter infrastructure, regulatory support and strong demand, New York may be one of the earliest markets for American Airlines taxis," said Adam Goldstein, CEO of Archer.

The company also aims to build a similar air mobile network in Los Angeles: connecting customers to airports, greatly reducing travel time. Archer's network will include Vertiports at major locations such as Los Angeles International Airport (LAX), Orange County, Santa Monica, Hollywood Burbank, Long Beach and Van Nuys.

Its goal is to start operations in New York and Los Angeles as early as next year. Additionally, it has been selected as the official taxi for the 2028 Los Angeles Summer Olympics and Paralympics. However, before commercial operations in the United States begin, companies must obtain their type certification from the Federal Aviation Administration.

Rendering shows an EVTOL aircraft flying in a major city in a skyscraper.
Image source: Getty Images.

In February, the Federal Aviation Administration (FAA) awarded Archer Part 141 certificate, formally recognizing it as a regulated pilot training institution. This is the third of four certificates the company has been waiting for launch operations at the FAA. It is waiting for the type certification of midnight aircraft, which will be the final certification before it can start commercial operations in the United States, hoping to get this certification sometime this year.

While solid forecasts have been made early, analysts covering Archer Aviation project revenue and earnings per share will look like this in the coming years:

Metric system

2025

2026

2027

2028

Income (in millions)

$17

$144

$437

$1,100

Earnings per share

($0.93)

($0.89)

($0.84)

($0.43)

In March, JP Morgan analyst Bill Peterson warned investors that it turns out that commercialization takes longer than expected. Peterson said he believes 2025 may have fallen by the table because the UAE launch is different from expectations.

However, Archer Aviation Management told investors on a May earnings call that it will launch in the UAE later this year and plans to offer a pilot midnight plane to the region this summer. That is, if its launch is delayed to the UAE or other key areas, it will affect the timing of its revenue.

Therefore, investors should closely monitor Archer's cash burn rate, especially since it still does not generate any meaningful revenue. The good news is that Archers raised their cash balance by $190 million in the first quarter and had liquidity over $1 billion.

Archer Aviation is an emerging company in an emerging industry that is still in its early stages of development. There is still controversy about the value of urban air flow market. Not only that, investors also face risks related to the timing of certification, production and launching commercial operations.

The company is capital-rich today, so its cash runway is not an immediate problem. However, a delayed schedule could prolong its cash burn, which could make the stock trade-off if funds need to be raised.

Investing in Archer Aviation may not be suitable for all investors. This is income, and its growth story is still early on. If you buy stocks, consider your investment in archers as speculative growth, and only a portion of the portfolio may be satisfied with this high risk and potentially high return inventory.

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Where is Archer Airlines in 3 years? Originally published by Motley Fool