Is Archer Aviation a Hidden Bargain After 17% Jump and DCF Upside in 2025?

• Wondering if Archer Aviation at around $8.40 is a hidden bargain or just another hype stock in the eVTOL space? Let us break down what the market is really pricing in here.
• The stock has bounced about 7.3% in the last week and 17.0% over the past month, even though it is still down 12.2% year to date and 10.4% over the last year, after a wild 366.7% gain over three years.
• Recent moves have been driven less by day to day noise and more by growing confidence in the electric air taxi theme. Archer regularly features in discussions around future urban mobility and FAA certification progress. On top of that, its partnerships with major industry players and ongoing test milestones have kept investor interest alive even through the pullbacks.
• Right now Archer scores a 4/6 valuation check score, suggesting it screens as undervalued on most of our metrics, but not all. Next we will walk through those valuation methods in detail, before finishing with a more holistic way to judge whether the current price truly makes sense.

Find out why Archer Aviation's -10.4% return over the last year is lagging behind its peers.

Approach 1: Archer Aviation Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and then discounting them back to their value in today’s dollars.

For Archer Aviation, the latest twelve month Free Cash Flow is roughly -$481.4 Million, reflecting heavy investment and no profitability yet. Analysts expect cash flows to stay negative for several years, with -$550.2 Million in 2026 and -$451.2 Million in 2027, before turning positive. Simply Wall St then extrapolates beyond analyst horizons, with projections rising to $1.22 Billion of Free Cash Flow by 2035 as the business scales.

Based on this 2 Stage Free Cash Flow to Equity model, the intrinsic value is estimated at $21.93 per share. Compared with the current price around $8.40, the model implies the stock is about 61.7% undervalued. This indicates the market is still heavily discounting Archer’s long term commercial ramp up and execution risks.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Archer Aviation is undervalued by 61.7%. Track this in your watchlist or portfolio, or discover 899 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Archer Aviation.

Approach 2: Archer Aviation Price vs Book

For profitable companies, price based multiples are a simple way to gauge how much investors are willing to pay for the underlying business. While earnings focused ratios are popular, for asset heavy, early stage businesses like Archer, the price to book multiple is often more informative because it compares the share price with the net assets that support future growth.

In general, higher growth and lower risk justify a richer multiple, while slower growth or higher uncertainty call for a discount. Archer currently trades at around 3.72x price to book, which is roughly in line with the Aerospace and Defense industry average of about 3.73x and a bit below the peer group average of roughly 4.11x. On the surface, that suggests the market is valuing its asset base fairly conservatively given its ambitious growth story.

Simply Wall St also uses a Fair Ratio, a proprietary estimate of what Archer’s price to book should be given its growth outlook, profitability profile, industry, size and risk factors. Because this Fair Ratio directly incorporates those fundamentals, it is a more targeted benchmark than raw peer or sector averages, which can be skewed by very different business models. At present, Archer’s actual multiple sits below this fundamental Fair Ratio, which indicates potential upside if the company delivers on expectations.

Result: UNDERVALUED

PB ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1458 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Archer Aviation Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect the story you believe about a company with the numbers behind its fair value. A Narrative is your own investment storyline for Archer Aviation, where you spell out how you think its revenue, earnings and margins might evolve, and link that directly to a financial forecast and a fair value estimate. Narratives on Simply Wall St, available to millions of investors through the Community page, make this process accessible by turning your assumptions into a clear valuation you can compare with the current share price to decide whether to buy, hold or sell. They update dynamically when new information, such as earnings releases or major news, is published so your view never goes stale. For Archer, one investor might build a Narrative that assumes rapid commercialization and a much higher fair value, while another assumes slower adoption, tougher regulation and a far lower fair value.

Do you think there's more to the story for Archer Aviation? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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