ACHR

Why Archer Aviation Stock Just Crashed

Key Points

Archer Aviation (NYSE: ACHR) stock tumbled 12% through 11:30 a.m. ET Tuesday after missing on earnings last night.

Analysts weren't optimistic about Archer heading into the electric vertical takeoff and landing aircraft manufacturer's (eVTOL) Q4 report, expecting a $0.24-per share loss on sales of approximately $0. The good news is that Archer did have some revenue last quarter -- about $300,000. The bad news is that it ended up losing $0.26 per share -- two cents worse than feared.

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Woman with suitcase looks up at a hovering air taxi.

Image source: Getty Images.

Archer Aviation Q4 earnings

$0.26 per share in Q4 2025 losses doesn't sound great, but it's better than the $0.44 per share Archer lost in Q4 2024. Investors might have been pleased by the number except for one thing: How Archer made its losses shrink.

The size of the company's net loss, you see, didn't actually change much -- $198 million lost a year ago, $189 million this time around. The reason the per-share loss shrank so much was that there were so many more shares this time.

Basically, Archer sold a lot of stock and spread its losses around among more shares outstanding -- thus diluting its shareholders by 57%. That will come back to bite shareholders, if and when the company ever turns profitable, when each share a shareholder owns has less claim on the profits the company earns.

Is Archer Aviation stock a buy?

Should you buy Archer anyway? That really depends on whether you think the company will earn so much, eventually, to make the dilution worth it. According to management, Archer will begin making its first "passenger-carrying" (and revenue-generating) flights this year. Most analysts, though, don't expect the company to turn its first profit for another five years, in 2030.

We shall see.

Should you buy stock in Archer Aviation right now?

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Rich Smith 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.

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