Archer Aviation (ACHR)
Currently trading at $5.77, ACHR stock is now down around 57% from its $14 peak in July 2025 – and this has investors wondering, is this the perfect time to buy the dip or should they sit this one out? Given they are pre-income, it’s tough to do a quick and easy valuation but there are other methods besides earnings multiples, PEG ratios, and EPS forecasts that we can use. For our analysis we will be using 3 different methods to try and gauge if Archer aviation stock is currently overvalued or undervalued.
Forward Price to Sales
The first measure of valuation is a revenue multiple analysis using a forward price to sales calculation. Having $300K in TTM revenue isn’t representative of the companies potential because they haven’t had the opportunity to started production to fill their massive backlog of contracts. That’s why we will use analyst estimates of what their future revenue could look like. Some analysts are estimating a revenue of $308M for 2027 and $357M for 2028. We are going to use a forecasted revenue of $308M for 2027 in our calculation given it is the closest to today’s date. At a market cap of $4.3B this gives them a price to sales ratio of 14; a high figure on it’s own, but even more so given this relies on Archer going from $300K revenue to $308M in just over a year. By this metric, ACHR is currently overvalued.
Forward Price to Earnings
The second measure of valuation we can attempt to use is an earnings multiple calculation, by way of profit margin. Currently, airline profit margins are about 3.9% on average. Again using a $308M revenue forecast for 2027 (which is in our opinion, optimistic), that would give ACHR a net income of just over $12M. And assuming the stock price remains unchanged one year from now, this would give ACHR an EPS of $0.02 and a PE ratio of 289. By this metric, ACHR is also overvalued.
Industry Growth and Market Share
Lastly, we can attempt to determine the potential size of ACHR’s market cap using industry forecasts and theoretical market share. According to this estimate, the eVTOL market is expected to reach $41.8B by 2030. Other research has shown that the world’s largest aircraft manufacturer by revenue is Boeing at around a 30% market share. Let’s suppose that ACHR is able to take this top spot (their recent FAA approval improves confidence in this outcome) and is able to secure a 30% stake in the projected $42B eVTOL market. That would give them revenues of $12.6B per year, which translates to a price to sales of 0.3 and price to earnings of 8.7.
These numbers are good, but keep in mind those revenues need to be discounted according to their risk premium, and the risk premium is going to be super high for this right now given the Beta is 3.16. Discounting this revenue projection at a WACC of 9.3 – or the return investors expect from a stock this risky – means their forward PE would look more like 13. This number is still pretty low and it does indicate that ACHR may be undervalued. In fact, that would put a realistic fair value of ACHR stock at a $8.87, which is 54% higher than where it trades today. However, this relies on the eVTOL market growing to $42B and ACHR being able to capture a 30% market share by 2030, and we have low confidence either of these things will happen.
For these reasons, we put ACHR stock as high risk, high reward and we have it rated a Strong Sell with no official one year price forecast. The average analyst rating for this stock is a Strong Buy with a 128% one year upside.
Topics: ACHR price forecast, ACHR stock analysis
