Investors are fleeing Archer Aviation Inc. (NYSE: ACHR) today after the eVTOL company reported disappointing financial results for Q4.
ACHR was expected to generate revenue of up to $0.2 million in the fourth quarter.
The flying robotaxi company did not only fail to generate any revenue for the three months ending December 31, st but it also lost $1.69 per share – much more than the 30 cents that experts had predicted.
Archer Aviation shares are down by nearly 15% after its quarterly report on Friday.
Archer Aviation stock drops after Q4 earnings
Archer Aviation shares are down today because of its management’s over $98 million in adjusted operating expenses for the 4th quarter.
This number was above the company’s guidance. It indicates continued high spending. Investors are concerned, even though its balance sheet is relatively strong with more than one billion dollars in overall liquidity.
It could be due to the fact that ACHR’s guidance for Q1 calls for a loss on adjusted EBITDA of approximately $100 million.
The eVTOL company has not yet received FAA type certification. This means that its commercial operations will be delayed in the United States.
Positives from ACHR’s Quarterly Release
The NYSE listed company has secured Abu Dhabi Aviation, as its first launch partner.
This is a positive development, as ACHR could generate revenue of tens or even hundreds of millions of dollars if it uses Archer aircraft to its full potential by the end 2025.
The flying robotaxi specialist has also committed to producing up to 10 Midnight aircraft in this year, now that the Georgia factory (ARC), which was completed last year, is complete.
Archer Aviation, according to a press release issued on Friday, is also “eyeing a strong demand for its planned hybrid aircraft in the defense market as well as beyond” and that it is developing under an exclusive partnership With Anduril Industries Inc.
Should you buy Archer Aviation stock now?
Archer Aviation’s stock is under pressure today despite a bullish report from HCW analyst Amit dayal.
Dayal reiterated this morning his “buy” recommendation on ACHR shares, which he believes will reach $12.50 by the end of this year.
The analyst’s target price indicates a potential increase of around 80% over current levels.
HCW is optimistic about Archer Aviation, as it’s making great progress in commercialising and appears to be well positioned to generate sales via the launch-edition programme by the year 2025.
Dayal, in a note to clients today, said that investors could also be encouraged by the company’s strong cash position. It is enough to fund operations for at least another 10 months.
He is also optimistic about the firm’s partnership With Anduril.
This post Why did Archer Aviation’s stock plunge 15% on Friday at market opening? This post may be updated as new information unfolds
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