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    Archer Aviation (ACHR): Valuation Check After Saudi GACA Air Taxi Deal and Karem Tiltrotor Technology Agreement

    Simply Wall St·12/16/2025 11:18:11
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    Archer Aviation (ACHR) just landed a headline collaboration with Saudi Arabia’s General Authority of Civil Aviation, a move that could fast track electric air taxi services across the Kingdom and expand Archer’s long term revenue runway.

    See our latest analysis for Archer Aviation.

    Despite landing headline partnerships in Saudi Arabia, Miami and with Karem Aircraft, Archer’s 1 year total shareholder return is still negative, and recent 3 month share price returns suggest momentum has cooled for now.

    If moves like Archer’s Saudi deal have your attention, this could be a good moment to explore other high growth tech and aviation innovators through high growth tech and AI stocks.

    With the stock down double digits over the past year but still trading nearly 50 percent below analyst targets, is Archer a misunderstood early stage winner in eVTOL, or is the market already pricing in its future growth?

    Discounted Cash Flow Valuation, A Deep Undervaluation Signal

    Our DCF model estimates Archer Aviation’s fair value at approximately $22.14 per share, compared to the latest close of $7.83, implying the stock trades at a steep discount.

    The SWS DCF model projects Archer’s potential future cash flows over time, then discounts those back to today’s dollars using an appropriate rate to reflect risk and the time value of money. This approach focuses on the company’s long term cash generation rather than short term earnings, which is particularly relevant for early stage, high growth businesses.

    For Archer, which currently generates negligible revenue but is forecast to grow sales at roughly mid double digit annual rates while remaining loss making for several years, a DCF framework helps translate that distant growth potential into a single present day value estimate. The result is a fair value significantly above the current market price. This suggests investors are heavily discounting the company’s ability to turn its ambitious eVTOL roadmap into profitable cash flows over time.

    Look into how the SWS DCF model arrives at its fair value.

    Result: DCF Fair value of $22.14 (UNDERVALUED)

    However, sustained losses and weak recent share momentum could signal execution risks, especially if commercialization timelines slip or regulatory frameworks in key markets evolve slowly.

    Find out about the key risks to this Archer Aviation narrative.

    Boardroom And Management, Strengths And Red Flags

    Governance at Archer is a mixed picture. On one hand, board oversight looks solid, with around 86 percent of directors classified as independent and an average tenure of 4.1 years. This suggests a seasoned group that can challenge management and provide continuity as the company scales.

    By contrast, the executive bench is relatively new, with the management team averaging just 1.8 years in their roles. For a capital intensive, highly regulated business still pre revenue, that limited track record introduces execution risk, especially around certification milestones, manufacturing ramp up and commercial deal delivery.

    Investor scrutiny is also likely to focus on incentives. CEO Adam Goldstein’s total compensation of about $17.76 million is more than double the typical $8.19 million package for similar sized US companies. This comes at a time when Archer remains loss making and is not expected to turn profitable over the next three years.

    Alongside those governance dynamics, capital structure and funding quality warrant attention. Archer currently reports negligible operating revenue and has relied on higher risk funding sources rather than customer deposits, while shareholders have been substantially diluted over the past year as the company raises cash to finance development.

    Combined with a negative return on equity of roughly 37.9 percent and expanding losses over the past five years, this backdrop underscores why the market may be cautious even as long term revenue growth forecasts remain exceptionally strong.

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Archer Aviation for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 907 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Build Your Own Archer Aviation Narrative

    Ultimately, if you see things differently or want to dig into the numbers firsthand, you can assemble a personalized view in just minutes, Do it your way.

    A great starting point for your Archer Aviation research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

    Looking for more investment ideas?

    Before markets move on without you, put Simply Wall Street’s powerful Screener to work and line up your next potential winners in just a few clicks.

    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.