Considering the current low price range of Archer Aviation's stocks under $10, is it the optimal moment to make a purchase?

In the realm of electric vertical takeoff and landing vehicles (eVTOLs), Archer Aviation is making waves with its innovative designs and ambitious growth plans. The company, with a market capitalization of $6 billion (as of the latest reports), has its sights set on selling 50 of its flagship product, the Midnight aircraft, per year.

The Midnight aircraft, a key component of Archer Aviation's plan to host point-to-point air taxi networks, is currently undergoing certification from the Federal Aviation Administration (FAA). However, the process is proving to be a significant hurdle due to the novelty of the vehicle. The FAA's full approval is uncertain, given the safety inspection risks associated with eVTOLs.

The certification process is not the only challenge facing Archer Aviation. The company is currently burning $477.5 million in free cash flow annually, a figure that could pose problems for profitability in the future. Selling 50 Midnight aircraft per year would generate $250 million in revenue, but this falls short of covering the current burn rate.

To justify its market cap, Archer Aviation may need to sell hundreds of aircraft annually. The company has already secured orders for hundreds of Midnight aircraft, with an estimated average price of $5 million each. These orders provide a promising start, but the company will need to continue to secure more orders to achieve its growth goals.

Archer Aviation's founder, Adam Goldstein, is no stranger to challenges. He is leading the company in its mission to have air taxi networks in cities such as New York, Los Angeles, and Abu Dhabi within the next few years. In Los Angeles, Archer Aviation is racing to be ready for the 2028 Summer Olympics, demonstrating the company's commitment to pushing the boundaries of urban mobility.

Investors should approach Archer Aviation with caution, despite the stock's current price of $8.96 (ACHR on the NYSE). The uncertainty surrounding the certification process and the need for significant revenue growth to cover costs may make the stock a risky investment. As always, investors are advised to do their own research and consider seeking advice from a financial advisor before making investment decisions.

Considering the current low price range of Archer Aviation's stocks under $10, is it the optimal moment to make a purchase?