Key Points
Archer Aviation currently trades at $5.80 but has traded above $13 per share within the last year.
Rebounding on the share price will be no small feat as Archer is posting substantial losses that will likely intensify as production ramps up.
The company appears to be on track to launch commercial flights this year, but public-sector deals could be a bigger catalyst.
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Archer Aviation (NYSE: ACHR) has had a bumpy ride across the first four months of 2026's trading. The electric vertical takeoff and landing (eVTOL) aircraft company's share price is down roughly 23% year to date as of this writing and 57% from its lifetime high, but some investors and analysts are betting the stock is poised for a big rebound.
For example, analysts at Canaccord raised their one-year price target on Archer Aviation from $12 per share to $13 per share in a research note published in November. Could the eVTOL specialist really go on to hit that valuation over the next year or so?
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Image source: Archer Aviation.
Could Archer be poised for a massive rally?
With Archer Aviation stock trading at $5.80 per share as of this writing, the company's stock would need to rocket 124% higher to hit Canaccord's target of $13 per share. While it's possible that the company's valuation could rise significantly above current levels in the near term, expecting the stock to more than double over the next year is a tall order.
Archer Aviation currently has a market capitalization of roughly $4.2 billion and is valued at approximately 291 times this year's expected sales. With its most recent quarterly update, the company said that it remains on track to begin piloted operations through the White House's eVTOL Integration Pilot Program. Archer also said that it remains on track to launch commercial operations in the United Arab Emirates this year.
The potential for an end to the Iran war bodes well for Archer's goal of launching its first customer-carrying flights this year. In response to attacks on its territories by the U.S. and Israel, Iran carried out a substantial number of rocket strikes on targets within the United Arab Emirates.
When Archer eventually launches commercial flight operations, performance will be under the microscope. Debuting flying taxi services comes with many safety and logistical concerns, and the possibility of additional Iranian rocket strikes within the UAE would likely add further complexities, making launching flight services in the country impractical.
If the Iran war winds down soon, Archer's launch of commercial flight services in the UAE this year seems like a realistic possibility.
Archer investors should keep stock dilution in mind
Archer posted a net loss of roughly $618.2 million last year. Meanwhile, the company closed out the quarter with cash and equivalents totaling roughly $1.96 billion.
Archer's current cash burn rate suggests that the company has enough capital on hand to fund its operations for roughly the next three years, assuming recent operating trends hold roughly steady. On the other hand, the eVTOL specialist is still in the early stages of ramping up its manufacturing operations. The increased vehicle production needed to support strong revenue growth will also likely lead to significant cost increases, and the business will likely be producing vehicles at a loss for years to come.
With that in mind, Archer will almost certainly move to raise funds through selling new stock or taking on debt. The company has relied heavily on new stock sales to raise funds since going public via a special purpose acquisition company in September 2021. The stock offerings have had a dilutive impact for existing shareholders, and I think there's a very good chance that the company will continue to aggressively sell stock in order to strengthen its balance sheet and create the capital foundations needed to fund its scaling.
Is $13 per share a reasonable target for this year?
Given the speculative and relatively soft sales outlook for this year and the likelihood that Archer will continue to issue new stock, I think there is little chance the company will hit Canaccord's price target of $13 per share in 2026. While it's certainly possible that the stock will surge above current levels, the business will likely post a significantly larger loss this year and modest revenue even if the launch of commercial operations proceeds successfully. Alternatively, I do think it's possible that the announcement of new defense-related partnerships could spur a big rally for the stock -- but investors should understand that such an outcome is highly speculative.
It seems unlikely that the stock will hit $13 per share this year, but that doesn't necessarily mean that Archer is a terrible investment. Expecting a stock to more than double inside of a year is almost always a recipe for disappointment, and investors can better position themselves for wins by focusing on the long term.
Over the last year, Archer stock has traded as high as $14.62 per share -- so its bouncing back above $13 per share certainly isn't out of the question. The company appears to be behind rival Joby Aviation when it comes to flight-test hours and the process for receiving commercial flight authorization from the U.S. Federal Aviation Authority, but it's within the realm of possibility that some positive news developments and a bullish backdrop for the broader market could power huge gains for the stock. Still, investors should proceed with the knowledge that Archer's potential for explosive upside also carries significant risk.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
