Archer Aviation Inc.’s ((ACHR Quick QuoteACHR - Free Report) ) Midnight aircraft recently completed its longest piloted flight to date, flying 55 miles in 31 minutes at more than 126 miles per hour. This marked an important milestone for Archer as it works toward getting certification for the Midnight aircraft in the United States and prepares for its commercial launch in the UAE.

Rising urban traffic is fueling investor interest in electric vertical takeoff and landing (eVTOL) solutions. With its key partnerships and regulatory progress, Archer remains a leading contender in the eVTOL market. The latest announcement might lure investors targeting next-generation aerospace to buy this stock.

However, before making a hasty decision, let’s take a look at the stock’s price performance, growth opportunities, valuation and possible risks, to make a more informed decision.

ACHR Stock’s 6-Month Performance

Archer’s shares have gained 1.7% in the past six months, underperforming the Zacks Aerospace-Defense industry’s growth of 21.3% and the broader Zacks Aerospace sector’s gain of 22.5%. It has also underperformed the S&P 500’s return of 6.8% in the same time frame.

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On the contrary, a stellar performance can be seen from other industry players in the past six months, such as Joby Aviation ((JOBY Quick QuoteJOBY - Free Report) ) and Embraer ((ERJ Quick QuoteERJ - Free Report) ), which are also involved in the eVTOL market. Notably, shares of ERJ have surged a solid 35.9%, while those of JOBY rose 112.8% in the past six months.

Tailwinds Driving Archer

A handful of announcements made by Archer in recent months must have been driving the stock’s share price. In August, the company accelerated its defense program with two strategic acquisitions that brought in advanced technologies and expertise, strengthening its position to meet growing demand from government and defense customers. In July, the company began test flights in Abu Dhabi, a key step toward building its presence in the Middle East and moving closer to commercial launch in the region. In June, Archer partnered with Jetex, a private aviation leader, to integrate its global network of terminals into the Midnight air taxi service, ensuring that the necessary infrastructure is in place to support future operations.

Meanwhile, per ACHR’s second-quarter 2025 results announcement, it is concurrently manufacturing six Midnight aircraft across its supply chain, three of which are in final assembly across its facilities. Together, these announcements reflect Archer’s focus on expanding internationally while preparing for large-scale commercial rollout for its Midnight eVTOL.

However, considering the fact that ACHR is yet to generate revenues and is still incurring huge operating expenses (as is also evident from its second-quarter results), its share price gains might not have been able to exceed the industry’s return over the last six months.

Will ACHR Continue to Rise?

The global eVTOL market is expected to grow steadily as demand for urban air mobility increases and new technologies in sustainable transportation continue to advance. These developments are creating opportunities for companies that are actively investing in this sector. Archer, Joby Aviation and Embraer are among the leading players that are positioned to benefit from this long-term trend as commercial services expand and regulatory support strengthens worldwide.

To this end, the Mordor Intelligence firm estimates that the global urban air mobility market will witness a compound annual growth rate of 19.2% during the 2025-2040 time period.

Such market growth trends bolster Archer’s prospects, especially once its Midnight jets become commercially available in the open market.

Let’s take a sneak peek at ACHR’s near-term earnings estimates to check if they also reflect the same.

Earnings Estimates for ACHR

The Zacks Consensus Estimate for ACHR’s near-term earnings indicates a year-over-year improvement.

Image Source: Zacks Investment Research

The consensus mark for its near-term earnings implies an upward revision over the past 60 days, indicating enhanced investor confidence in the stock’s earnings growth capabilities.

Image Source: Zacks Investment Research

ACHR Shares Trading at a Discount

ACHR stock is trading at a discount, with its trailing 12-month Price/Book (P/B TTM) being 3.03X compared with its industry average of 5.77X.

Image Source: Zacks Investment Research

Its industry peer, ERJ, is also trading at a discount. ERJ is trading at a P/B TTM of 2.85X. However, JOBY is trading at a P/B TTM of 14.06X.

Risks to Watch

While Archer looks promising in the short term, its long-term future is still not certain. The eVTOL industry is very new, and the company’s ability to design, certify and scale production will depend on how quickly the industry develops and how strong the demand for eVTOL aircraft becomes. Safety, noise and affordability concerns could also slow down public acceptance and limit demand.

Another challenge is that Archer has not yet started generating revenues. Until the company begins commercial flights and builds a solid customer base, it will be difficult to measure its long-term value. Archer also has a negative Return on Invested Capital (ROIC), which means it is not yet using its funds effectively to generate returns.

What Should an Investor Do?

Investors interested in Archer may consider adopting a wait-and-watch approach for this stock, given its absence of revenues and a negative ROIC despite making steady progress through flight testing, strategic partnerships and global expansion efforts.

Nevertheless, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering its positive performance at the bourses over the past six months, discounted valuation and upward revision in earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.