Archer Aviation (ACHR +0.33%) is working to bring air taxis to the world. It already has an electric vertical takeoff and landing (eVTOL) aircraft called Midnight that is being tested for reliability.
That's the next big step, but as a start-up trying to break into a capital-intensive industry, Archer is in a race against the clock. When it reports second-quarter earnings in early August, the update is likely to be very positive.
Here's why more-aggressive investors might want to buy before the upcoming earnings release.
What does Archer Aviation do?
Right now, Archer spends lots and lots of money -- and for good reason. The company is looking to break into the aerospace industry, which is a mature business sector with a small number of very large players that dominate the space. So it is taking on a very material task.
Image source: Getty Images.
The edge that Archer is trying to exploit is a new type of aircraft. Its eVTOL is a short-haul airplane that will be used as an air taxi. That's a completely different way to think about airplanes. It already has a prototype and is starting to ramp up production.
The airplanes it is producing are largely meant for testing, so it isn't making money selling them just yet. But it has to spend money because it needs to have its eVTOL fully vetted by regulators if it wants to earn approval by the Federal Aviation Administration (FAA) to carry commercial customers.
There are two big issues that come out of this strategy. FAA approval is highly important to Archer's future. And, since it can't really earn money until it gets that approval, access to capital is also vitally important. Second-quarter earnings are likely to show improvement on both fronts.
Where does Archer stand today?
As of the first quarter of 2025, the company estimated that it was about 15% complete with a key FAA approval process. That was up a tiny two percentage points from the end of 2024. However, management made a key comment in its first-quarter shareholder letter, noting that the pace of the approval process was likely to increase.
On that score, a company press release on June 2 described a piloted flight of its aircraft as it moved on to the next phase of flight testing. It discussed the piloted test flight, but the real point of the release is to tell the world that it is moving forward in the FAA approval process.
When the company reports earnings, this flight -- and any subsequent flights -- will likely be discussed in greater detail. And there will be an update on the overall approval progress. Assuming the pace of approval picks up, as management has suggested, the company is moving closer and closer to generating revenue.
NYSE: ACHR
Key Data Points
That said, it is still a cash-burning start-up. So investors will also want to pay close attention to Archer's balance sheet. And the update here also seems likely to be a positive one.
That's because it sold 85 million shares of Class A common stock for $10 per share. With the sale, the company reported that its liquidity position was around $2 billion. The more cash it has, the more likely it is that it will be able to fund itself through the approval process.
More good news is coming Archer's way
All in, it seems like Archer Aviation's second-quarter 2025 earnings will be filled with good news. And that backs the long-term thesis for investors buying the stock in the hopes it can successfully break into the aerospace industry with an air taxi.
To be fair, it is still a high-risk investment, so only more-aggressive investors should be looking at it. But if you can handle owning a risky stock, buying before Archer Aviation's next earnings update could make a lot of sense.
