Archer Aviation (ACHR 3.07%) and Rocket Lab USA (RKLB 13.12%) are both highly speculative aerospace stocks. Archer is a developer of electric vertical take-off and landing (eVTOL) aircraft, while Rocket Lab sells reusable orbital rockets. But over the past 12 months, Archer's stock soared more than 220% as Rocket Lab's stock surged over 500%.
Let's see if either of these hot stocks is worth buying as a growth play today.
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Archer Aviation still has a lot to prove
Archer's flagship Midnight eVTOL aircraft can carry one pilot and four passengers. It can travel up to 100 miles on a single charge with a maximum speed of 150 miles per hour. It promotes the Midnight as a cheaper, greener, and easier-to-land alternative to helicopters, and it's already working with major airlines, automakers, and the U.S. Air Force to provide air taxi services.
The company also plans to launch its own air taxi service, which it claims will cost roughly the same as Uber Technologies' premium UberBlack service within the next two years.
Archer's backlog already includes hundreds of orders, and it claims it can increase its annual production to 10 aircraft in 2025, 48 aircraft in 2026, 252 aircraft in 2027, and 650 aircraft in 2028. It believes it can eventually manufacture up to 2,000 aircraft annually as it scales up its business.
That growth trajectory would be incredible, but Archer has only delivered a single Midnight aircraft to the U.S. Air Force so far. That delivery didn't generate any revenue because it was a test aircraft, but Archer expects to deliver its first "revenue-generating" aircraft to Abu Dhabi Aviation for its new air taxi service by the end of this year.
Archer also partnered with Palantir Technologies, a leading provider of analytics and AI services for the U.S. government, this March to accelerate the production of its aircraft and strengthen its aviation systems.
Analysts expect Archer's revenue to rise from nothing in 2024 to $12.7 million in 2025, $143.9 million in 2026, and $437.1 million in 2027. But with a market capitalization of $5.8 billion, it already trades at 13 times its projected sales for 2027 -- so a lot of growth is already baked into its high-flying shares.
The company also won't come close to breaking even anytime soon. But if you expect Archer's eVTOL aircraft to replace helicopters over the next decade, it might just deserve that higher valuation.
Rocket Lab is firing on all cylinders
Rocket Lab's flagship reusable rocket, the Electron, is used to carry small payloads of up to 300 kilograms into space. It's been successfully launched 64 times, was used to deploy 225 satellites, and operates from three dedicated launch pads. Its next rocket, the Neutron, will carry a maximum capacity of 15,000 kilograms when it launches in the second half of this year.
The company already serves large customers like NASA, the U.S. Space Force, the Swedish National Space Agency, Capella Space, and BlackSky Technology. It launched six rockets in 2021, nine in 2022, 10 in 2023, and 16 last year.
From 2021 to 2024, Rocket Lab's annual revenue rose more than sevenfold from $62 million to $436 million as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved from negative 70% to negative 22%. Over the past year, it shipped two research satellites for NASA and gained an additional contract for the agency's next Mars mission.
It also agreed to deploy a constellation of 25 satellites for Kinéis, a global Internet of Things (IoT) connectivity provider, sealed a multiyear Electron launch contract with Japan's Institute for Q-shu Pioneers of Space (iQPS), and secured new U.S. defense contracts.
From 2024 to 2027, analysts expect Rocket Lab's annual revenue to nearly triple from $436 million to $1.18 billion. They also expect its adjusted EBITDA to turn positive in 2026 and for it to turn fully profitable by 2027. That rosy outlook suggests it will keep thriving in the shadow of its bigger competitor, SpaceX, which launched a record 138 Falcon rockets in 2024. But with a market cap of $11.7 billion, it also isn't a bargain at nearly 10 times its projected sales for 2027.
The better buy: Rocket Lab USA
Archer Aviation could have plenty of upside potential if the nascent eVTOL market takes off, but it hasn't proven that its business model is sustainable yet. Meanwhile, Rocket Lab USA has significantly ramped up its launches over the past few years, it's developing new rockets, and its margins are steadily improving as economies of scale kick in.
So, if I had to pick one of these speculative stocks over the other, I'd stick with Rocket Lab because it seems better prepared to expand its fledgling business.
