If you’ve been looking at Archer Aviation lately, you’re not alone. The stock has been on a strong run, up just 0.4% last week, but down 264.2% over the past year. Many investors are asking the same question: Is this growth just picking up or is there turmoil ahead?
Why the excitement? Headlines about successful eVTOL test flights and key partnerships with global airlines added to the optimism. Investors also appear to be changing their risk appetite, especially after government agencies have expressed strong support for urban air mobility. That may have a lot to do with the stock’s stunning one-year run and recent 21.7% jump over the past month. Even on a year-over-year basis, the rise is impressive at 18.0%, indicating a shift in the market’s view of the risks and opportunities in the air mobility space.
But the big question remains: Is Archer Aviation’s valuation really justified? We rate the company 3 out of 6, which means it’s undervalued in half of the key areas we look at, but still has room for improvement. Of course, the numbers tell only part of the story.
Let’s break down how we measure value, and then I’ll share what really matters to those trying to get ahead of the curve.
Archer Aviation returned 264.2 percent over the past year. Find out how it stacks up against the rest of the aerospace and defense industry.
The discounted cash flow (DCF) model looks at a company’s future free cash flows, then discounts those projections to today’s value to estimate what the business is really worth right now. This method is widely used in growth sectors such as aerospace, where steady profits can be seen after several years.
Archer Aviation’s most recent free cash flow is -472.3 million. USD, which reflects high investment and development costs. Analysts predict that by 2029 the annual free cash flow can rise to a positive 286 million. Looking even further ahead, forecasts up to 2035 predicts that free cash flow will continue to increase annually, all denominated in US dollars. These assumptions combine analysts’ forecasts for the next five years, followed by extended projections to capture the full business growth profile provided by Simply Wall St.
The results are convincing. DCF’s analysis estimates Archer Aviation’s fair value at $29.72 per share. With the stock currently trading at a level that represents a 62% discount to this intrinsic value, this instrument appears to be a highly undervalued company.
Result: NOT ASSESSED
For more information on how we arrive at this true value for Archer Aviation, visit the valuation section of our company report.
ACHR discounted cash flow in 2025 in October
Our discounted cash flow (DCF) analysis shows that Archer Aviation is undervalued by 62.0%. Keep an eye on it in your watchlist or portfolio, or discover more undervalued stocks.
The price-to-book (PE) ratio is a common valuation tool, particularly useful for companies that are not yet profitable. For innovative players like Archer Aviation, early profits are typically reinvested into future growth, making traditional measures such as the price-to-earnings ratio less informative. Instead, PB offers a direct way to see how the market values a company’s assets relative to its book value today.
Both growth potential and business risk affect what is considered the “correct” PB ratio. When investors expect rapid growth or industry-changing breakthroughs, they may accept a higher PB. On the other hand, higher risk or inconsistent financial results usually justify a lower multiple.
Archer Aviation is currently trading at a PB ratio of 4.33x. This means it is slightly below the peer average (4.45x) and above the aerospace and defense industry average of 3.71x. While these comparisons are helpful, they don’t capture the unique nuances of Archer’s profile.
This is where Simply Wall St’s “fair Ratio” comes in. The Fair Ratio is designed to reflect the PB multiple that best matches Archer’s specific growth prospects, profit margins, risk and overall market cap. Unlike standard benchmarks, it goes beyond broad industry averages and peer groups, providing a more tailored view of valuation.
When comparing Archer’s actual PB ratio to the Fair Ratio, the difference is minimal, indicating that the market price is currently well in line with the fundamentals.
Result: ABOUT RIGHT
NYSE: ACHR PB Ratio 2025 in October
The PB ratio tells one story, but what if the real opportunity lies elsewhere? Discover the companies insiders are betting on rapid growth.
We mentioned earlier that there is an even better way to understand valuation. We will introduce you to Narratives. A narrative is your own story or perspective about a company based on your assumptions about future revenue, earnings, margins, and what you believe is fair value. Narratives brings the numbers to life by tying your Archer Aviation perspective directly to a financial forecast and then calculating true value based on your beliefs.
On the Simply Wall St platform, narratives are easy to create and can be used by millions of investors on the community page. Stories help you decide when to buy or sell by comparing the true value with the current price. They are updated automatically when new information is released, such as earnings or major news.
This means that investors can quickly react to new developments, refine their forecasts and see how their story differs from others. For example, one investor’s Narrative might see Archer’s intrinsic value as high as $36 per share, while another, taking a more cautious perspective, might value it as low as $11.
Do you think there is more to the Archer Aviation story? Create your own story to let the community know about it!
NYSE: ACHR Community Fair Value 2025 in October
This Simply Wall St article is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. We aim to provide you with long-term targeted analysis based on underlying data. Please note that our analysis may not take into account recent price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
Companies covered in this article include ACHR.
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