Grizzly Research Criticizes Archer Aviation's eVTOL Technology and Business Practices

Archer Aviation (ACHR) has been criticized in a report by Grizzly Research, which claims the company's eVTOL aircraft has design flaws and may not meet certification standards. The report also questions Archer's $6 billion order book, suggesting it is exaggerated. Archer is contrasted with competitor Joby Aviation, which is making significant advancements. Archer's financial health is mixed, with no revenue reported and a Piotroski F-Score of 3.

Archer Aviation (ACHR), a leading player in the electric vertical takeoff and landing (eVTOL) aircraft market, has come under scrutiny following a report by Grizzly Research. The report, released on Wednesday, accused Archer of overstating its technological progress and relying on misleading projections and public relations to support its valuation. Grizzly Research, a short-selling firm, stated that it collaborated with aerospace engineers to evaluate Archer's flagship aircraft, the Midnight, and concluded that the design is "fundamentally flawed and likely uncertifiable" by regulators [1].

Grizzly Research contrasted Archer's progress with that of rival Joby Aviation (JOBY), which is making "tangible and impressive" advancements in certification, infrastructure, and commercialization. Joby recently completed its first flight between two U.S. airports and announced plans to expand its production capacity, underscoring its progress towards commercial readiness [3].

Archer's financial health is mixed, with no reported revenue and a Piotroski F-Score of 3, indicating a weak financial performance. The company's stock price has soared in recent years, but it remains to be seen whether this growth can be sustained in the face of criticism and regulatory hurdles [2].

In contrast, Joby Aviation has shown strong progress in its certification efforts and commercialization plans. The company's recent acquisition of Blade Air Mobility's urban air mobility passenger business for up to $125 million is expected to provide it with a ready-made market for its aircraft, giving it a head start over competitors like Archer Aviation [3].

While both Archer Aviation and Joby Aviation face challenges in terms of scalability and public acceptance, Archer's strategic partnerships and faster production ramp-up give it an edge in commercialization. Joby's vertically integrated model and certification milestones, however, offer strong long-term potential. Despite shared risks, Archer Aviation currently holds the edge over Joby Aviation, with a Zacks Rank #3 (Hold) compared to Joby's Zacks Rank #4 (Sell) [2].

References:
[1] https://stocktwits.com/news-articles/markets/equity/grizzly-research-shorts-archer-aviation-calls-it-the-nikola-of-the-skies/chsU50qRdlP
[2] https://www.marketscreener.com/news/grizzly-research-says-we-are-short-archer-aviation-ce7c50dedf8dff24
[3] https://finance.yahoo.com/news/archer-vs-joby-evtol-stock-160100740.html