Archer Aviation (ACHR) is a key player in the industrials sector, specifically in the aerospace and defense category. The company's
fundamentals reveal a mixed picture. On the one hand, Archer Aviation boasts a robust net working capital of
492.2M and a current ratio of 14.05X, indicating a strong liquidity position. It also holds a significant amount of short-term investments worth
461.8M. On the other hand, the company reported a net income loss of 317.3M and an EBITDA loss of
321.4M, reflecting operational challenges. The company's enterprise value stands at 1.2B, with total assets amounting to 573.8M, and total stockholder equity at 493.3M. Archer Aviation's price to book ratio is 0.93X, slightly below the market average, which could suggest undervaluation. However, with an EPS estimate of a loss of 1.03 for the next year and a diluted EPS of a loss of 1.62, profitability remains a concern. Despite these challenges, the company's stock has seen a recent spike, and the highest analyst estimated target price stands at 12, indicating potential upside. However, investors should also be aware of the possible downside price of 0.0641. With 38.41% of shares owned by institutions, the stock's performance will be closely watched in the coming months. Despite relatively weak technical indicators, Archer Aviation has reported robust returns over the past few months and may be nearing a breakout point. The company is highly responsive to market trends. We can now consider Archer as a potential investment option for your portfolios.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Archer Aviation income statement, its balance sheet, and the statement of cash flows. Potential Archer Aviation investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Archer Aviation investors may use each financial statement separately, they are all related. The changes in Archer Aviation's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Archer Aviation's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Archer Aviation
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Archer Aviation performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Archer Aviation shares is the value that is considered the true value of the share. If
the intrinsic value of Archer is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Archer Aviation. Please read more on our
fundamental analysis page.
How important is Archer Aviation's Liquidity
Archer Aviation
financial leverage refers to using borrowed capital as a funding source to finance Archer Aviation ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Archer Aviation financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Archer Aviation's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Archer Aviation's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Archer Aviation's total debt and its cash.
What is the case for Archer Aviation Investors
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Archer Aviation is not uncomon. Institutional investors typically avoid acquiring a high percentage of Archer Aviation stocks because performing such an act may violate securities laws. They are usually not investing their own money, but rather making investments on behalf of their clients. Let's take a look at how the ownership of Archer is distributed among investors.
Ownership Allocation
Archer Aviation retains a total of 191.13 Million outstanding shares. Archer Aviation retains significant amount of outstanding shares owned by
insiders. An
insider is usually defined as a CEO, other corporate executive, director, or
institutional investors. class="underlinedLink" href="/invest/ratio/ACHR/Shares-Owned-by-Institutions">institutional investor who own at least 10% of the company's outstanding shares. Since such a large part of the company is owned by insiders, it is advisable to analyze if each of these insiders have been buying or selling the stock in recent months. Remember, it does not matter who owns the company or if the company is currently
losing money. If the true value of the company is more than the market pays for it currently, you can still have a good investment opportunity.
| Retail Investors30.02% | Insiders31.57% | Institutions38.41% |
| Retail Investors | 30.02 |
| Insiders | 31.57 |
| Institutions | 38.41 |
| 2020 | 2021 | 2022 | 2023 (projected) |
Current Assets | 37.4 M | 754.8 M | 545.5 M | 482.19 M | Total Assets | 41.8 M | 768.4 M | 573.8 M | 503.79 M |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Archer Aviation has an asset utilization ratio of 1.88 percent. This connotes that the company is making $0.0188 for each dollar of assets. An increasing asset utilization means that Archer Aviation is more efficient with each dollar of assets it utilizes for everyday operations.
| Current Assets | 482.19 Million | 93.97 |
| Assets Non Current | 30.53 Million | 5.95 |
| Goodwill | 407,018 | 0.0793 |
Archer Aviation (ACHR) has been making waves in the Aerospace & Defense sector, with recent technical indicators suggesting a potential bull run. The company's Beta of 2.27 indicates a higher volatility compared to the market, which could be a positive sign for risk-tolerant investors seeking significant returns. Despite a negative EBIT and operating income of
347.4M losses, Archer Aviation's book value stands at 1.684, with a price to book ratio of 0.93X, indicating that the stock is currently undervalued. Archer Aviation's end period cash flow is 72.3M, while the company holds cash and equivalents of
600.6M. However, the change in cash shows a decrease of 674.6M, which could be a point of concern. The company's total debt is relatively low at 22.2M, with a debt to equity ratio of 0.042%, suggesting a healthy financial structure. The company's shares are significantly owned by institutions, at 38.41%, which often indicates confidence in the company's
future prospects. The Wall Street target price for the stock is 9.25, suggesting a potential upside. However, investors should also consider the company's risk-adjusted performance of 0.1772 and the market risk-adjusted performance of 1.04 before making a decision. Despite the challenges, Archer Aviation's
fundamentals show potential for a bull run, but as always, investors should conduct their own thorough research before investing.
Will Archer retail investors exit after the fall?
Archer Aviation's latest Jensen Alpha, a measure of risk-adjusted performance, currently stands at 2.01. This indicates that the company has delivered a return that surpasses the expected return for its level of risk. However, this positive performance may not suffice to retain retail investors, particularly following a recent drop in the stock's price. The lingering question is whether these investors will interpret the dip as a buying opportunity or a warning sign to exit. Their decision will likely depend on their faith in Archer's long-term prospects and their risk tolerance. Archer Aviation has exhibited above-average volatility over the chosen time period. Investors are advised to closely examine Archer Aviation on an individual basis to ensure that their intended
market timing strategies align with their expectations about Archer Aviation's volatility. Understanding the different trends in
market volatility can often assist investors in timing the market accurately. Utilizing volatility indicators appropriately allows traders to gauge Archer Aviation's stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly affect
Archer Aviation's stock price, causing stress for investors as they watch the value of their shares plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices decline. In conclusion, Archer Aviation presents a compelling investment opportunity as we move into the latter part of September. With an Analyst Overall Consensus rating of 'Buy', the stock has a strong backing from the market experts. The Analyst Target Price Estimated Value stands at
$8.642, which is significantly higher than the current Valuation Market Value of
$6.41. The potential upside is further underscored by the Analyst Highest Estimated Target Price of $12. The company also enjoys a robust Valuation Real Value of $6.95, slightly above the Naive Expected Forecast Value of $6.99. However, investors should also be aware of the possible downside risk, as indicated by the Possible Downside Price of 0.0641. With the Fiscal Year End approaching in December, it would be interesting to see how Archer Aviation performs in the coming months. .
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Archer Aviation. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
[email protected]