Archer Aviation: Not the Discount You Think It Is

Archer Aviation (ACHR) has been making waves in the electric vertical takeoff and landing (eVTOL) aircraft market, but is it the discount it appears to be? Let's dive into the numbers and find out.

At first glance, ACHR seems like a bargain with a price-to-book (PB) ratio of 7.6x, which is higher than the peer average of 5.4x and the industry average of 3.3x. However, it's important to consider other valuation metrics to get a more comprehensive picture.



Archer's enterprise value (EV) to revenue and EV to EBITDA ratios are not provided, but its EV to EBITDA is -6.5x, indicating that the company's enterprise value is significantly higher than its earnings. This could be a red flag, suggesting that ACHR may be overvalued relative to its earnings.



Moreover, Archer's stock price has been volatile, with a beta of 3.16, indicating that its price has been more volatile than the market average. This could be a concern for risk-averse investors.



However, it's essential to consider the company's growth prospects and potential catalysts. Archer has made significant progress in its Midnight aircraft's certification program and plans to launch commercial operations in 2025. The company has also secured partnerships with major players like United Airlines and Japan Airlines, which could drive future growth.



In conclusion, while Archer Aviation may seem like a discount at first glance, its valuation metrics and stock volatility suggest that it may not be the bargain it appears to be. Investors should carefully consider the company's growth prospects and potential catalysts before making an investment decision. As always, it's crucial to do your own research and consult with a financial advisor before making any investment decisions.