Assessing Archer Aviation (ACHR) After Sharp Share Price Slide And Air Taxi Milestones

• If you are wondering whether Archer Aviation's share price really reflects what the business could be worth, you are not alone. That question is exactly what this article will unpack.
• The stock last closed at US$6.82, with returns of a 4.9% decline over 7 days, a 23.0% decline over 30 days, a 16.1% decline year to date, a 36.1% decline over 1 year, and a very large gain over 3 years that sits alongside a 49.1% decline over 5 years.
• Recent headlines around Archer Aviation have focused on its progress in the electric air taxi space and regulatory milestones. These developments have helped shape how investors think about its long term prospects and risk profile. This backdrop is important context for understanding why the share price can move sharply in both directions as sentiment swings between optimism and caution.
• On our valuation checklist, Archer Aviation scores 4 out of 6 on potential undervaluation, as seen in our detailed breakdown at valuation score of 4. Next we will look at how different valuation methods frame that score, before finishing with a more rounded way to think about what the stock might be worth.

Find out why Archer Aviation's -36.1% return over the last year is lagging behind its peers.

Approach 1: Archer Aviation Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today using a required rate of return.

For Archer Aviation, the latest twelve month free cash flow stands at a loss of about $481.4 million. Analysts have provided specific forecasts out to 2030, with projected free cash flow moving from a loss of $594.2 million in 2026 to a positive $829 million in 2030, all in $. Beyond the analyst horizon, Simply Wall St extends the projections through 2035 using its 2 Stage Free Cash Flow to Equity model, with each of those future cash flows discounted back to today.

Pulling those projections together, the model arrives at an estimated intrinsic value of about $88.51 per share. Compared with the recent share price of $6.82, the DCF output implies the stock is 92.3% undervalued on this set of assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Archer Aviation is undervalued by 92.3%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Archer Aviation.

Approach 2: Archer Aviation Price vs Book

For early stage or unprofitable companies, earnings based metrics like P/E are less useful, so investors often look at asset based measures such as the Price to Book, or P/B, ratio instead. Book value gives you a rough sense of what you are paying for the company’s net assets today, which can be a helpful anchor when profits are not yet established.

What counts as a “normal” or “fair” multiple is influenced by how quickly a company is expected to grow and how risky that growth looks. Higher expected growth and lower perceived risk can support a higher multiple, while slower growth or higher uncertainty often point to a lower one.

Archer Aviation currently trades on a P/B of about 3.0x, compared with the Aerospace & Defense industry average of around 4.0x and a peer group average of roughly 4.4x. Simply Wall St also calculates a proprietary “Fair Ratio” for P/B, which estimates the multiple that could be appropriate given factors such as earnings growth, profit margins, risk profile, industry, and market cap. Because this Fair Ratio is tailored to Archer Aviation’s specific characteristics, it can be more informative than a simple comparison with peers or the broad industry. In this case, the actual P/B is lower than the Fair Ratio, which indicates that the shares screen as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Archer Aviation Narrative

Earlier we mentioned that there is an even better way to understand what Archer Aviation might be worth. Let us introduce Narratives, which are simply your own story about the company linked to a clear financial forecast and an estimated fair value. On Simply Wall St’s Community page you can pick or create a Narrative by setting assumptions for future revenue, earnings and margins, and see how that flows through to fair value. You can then compare that with today’s share price to inform your own buy or sell decisions, and have that view automatically refreshed as new news or earnings arrive. For example, one Archer Aviation Narrative might assume very strong revenue growth and a high future P/E that supports a higher fair value, while another might assume more modest growth, a lower future P/E and therefore a lower fair value, even though both investors are looking at the same stock.

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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