Down More Than 60% From Its High, Is Now the Time to Buy Archer Aviation Stock?

Archer Aviation is highlighted as a lower-valued eVTOL peer to Joby, with shares down more than 60% from the 52-week high of $14.62 and 45% over the past year. The key catalyst is FAA Type Certification for the Midnight aircraft, where Archer says it became the first eVTOL company to close Phase 3 of the FAA's 4-phase process and expects operations to begin later this year. However, the article emphasizes substantial execution risk, including continued cash burn and losses even after approval.

Analysis

The market is treating ACHR and JOBY as if certification is a binary winner-take-all event, but the more important second-order issue is funding endurance after the first approval. If eVTOL becomes a real operating category, the initial equity rerate will likely be driven by who can finance fleet deployment, insurance, maintenance, and route economics without repeated dilution. That means the cheapest name is not automatically the best risk/reward; the one with the strongest balance sheet runway and the lowest implied future capital raise burden should outperform.

The competitive setup may actually favor a staged trade rather than a simple long. JOBY’s premium valuation already embeds more of the regulatory success path, so any delay in commercialization can compress its multiple harder than ACHR’s, while ACHR has more room to bounce on even incremental progress. But if approvals arrive and unit economics remain unattractive, both names can underperform for months as investors realize certification is only the start of a long, capital-intensive ramp.

The consensus appears to be underestimating how much of the upside can be captured without taking full idiosyncratic risk. The better trade is not “own eVTOL,” but “own relative mispricing around catalyst timing.” In the near term, the stock that matters most is the one with the next discrete regulatory milestone, not the one with the loudest headline cycle; over a 6-12 month horizon, cash burn and dilution will likely dominate share price unless commercial launch proves immediately scalable.

Key Decisions for Investors

• Trade the spread: long ACHR / short JOBY into the next 1-3 months. Rationale: ACHR has more valuation upside per incremental certification progress, while JOBY’s richer multiple leaves less room for disappointment; target a 15-25% relative move if catalyst flow stays asymmetric.
• If expressing a directional view, use ACHR call spreads instead of outright equity. Prefer 3-6 month tenors to capture a certification headline without overpaying for long-dated commercialization uncertainty; risk/reward is better than stock given dilution risk.
• Avoid naked long exposure in either name unless you can tolerate 12+ months of drawdown risk. The core failure mode is not approval delay alone, but post-approval financing pressure that can suppress multiple expansion even on positive headlines.
• For more conservative exposure, consider a small pair basket: long ACHR against a short basket of high-multiple pre-revenue aviation/advanced mobility peers. The trade isolates relative catalyst pricing while reducing broad factor risk.
• Set a hard risk trigger to reduce or hedge if either name raises capital on weak terms or if commercialization timelines slip by a quarter. That is the point where the market will likely transition from ‘regulatory optionality’ to ‘ongoing dilution discount.’