Archer Aviation Beats Q3 EPS But Stock Falls as Investors Focus on Dilution and High Costs

Shares of Archer Aviation (ACHR) dropped nearly 8% after reporting its third-quarter results, closing at $8.18 on November 7. This came despite the company beating earnings expectations and highlighting key developments in aircraft testing, funding, and infrastructure.

Archer Aviation is working to launch electric vertical takeoff and landing aircraft, known as eVTOLs, for short urban trips. It expects to start generating revenue in early 2026. However, the market’s response to its latest quarter showed that investors may be reacting more to funding-related concerns than to operational milestones.

Earnings Top Views, But Expenses Remain High

In Q3 2025, Archer Aviation posted a net loss of $0.20 per share, better than Wall Street’s forecast of a $0.30 loss and an improvement from the $0.29 loss in the same period last year. However, adjusted EBITDA loss widened to $116 million compared to $94 million last year. The increase was tied to higher operating costs, including more spending on staff as the company prepares for aircraft production and service.

Total operating expenses under GAAP rose to $175 million, while the company reported a net loss of $130 million for the quarter. Archer Aviation ended Q3 with $1.64 billion in cash, short-term investments, and cash equivalents. Shortly after the quarter ended, the company raised $650 million in new equity capital, bringing its total liquidity to over $2 billion. That funding helped strengthen its balance sheet, though the new shares may have raised dilution concerns for existing investors.

_{Operating costs continued to rise through mid-2025, with Research and Development taking a larger share. Spending growth reflects Archer Aviation’s push toward commercialization and regulatory milestones.}

Airport Acquisition and Aircraft Testing

One of the major updates from the quarter was Archer Aviation’s move to acquire Hawthorne Airport in Los Angeles for $126 million. The company plans to use the airport as a central hub for its planned air taxi service in the city. The site is located just three miles from Los Angeles International Airport and near major venues like SoFi Stadium and Intuit Dome.

This acquisition supports Archer Aviation’s plans around the LA28 Olympic Games and its broader goal to roll out a full urban air mobility network. The airport is also expected to serve as a testing site for the company’s AI-based aviation systems.

Meanwhile, its main aircraft, Midnight, completed key flight testing milestones. Recent flights reached over 55 miles in range, exceeded 30 minutes in time, and hit speeds of more than 150 mph. These trials were held at the California International Air Show and are part of the path toward FAA certification, which the company expects to reach as early as Q3 2026.

The company also expanded globally during the quarter. Archer Aviation progressed its Launch Edition program in the United Arab Emirates, which includes early payments from airline partners. It also built partnerships with Korean Air and Japan Airlines, who chose Archer as their preferred air taxi provider.

In addition, Archer Aviation acquired a portfolio of patents from Lilium (LILM), which boosts its intellectual property in advanced fan propulsion and flight control systems.

Analyst Sentiment Stays Positive

Despite the recent drop in stock price, Wall Street analysts largely remain supportive. Out of 7 analysts covering Archer Aviation in the past three months, 6 rate the stock a Buy and 1 has a Hold.

Analyst Amit Dayal from H.C. Wainwright reiterated a Buy with an $18 target, pointing to the company’s strong cash position and clear roadmap toward commercialization. Analysts also cited the airport acquisition, successful flight testing, and global partnerships as signs of progress.

Still, not all feedback was bullish. J.P. Morgan analyst Bill Peterson maintained a Hold rating, with a price target between $10 and $8. He flagged the near-term risk tied to execution and the timeline for certification.

Looking Ahead

Archer Aviation expects to see its first revenues in the first quarter of 2026. For Q4, it guided to an adjusted EBITDA loss between $110 million and $140 million. While its business remains pre-revenue, its cash runway and strategic moves show it is aiming for growth in the years ahead.

Even so, the drop in stock price shows that the market is still cautious. With high expenses and a longer path to profitability, investors appear to be weighing the company’s future upside against near-term funding impacts. As Archer Aviation pushes toward certification and early operations, the next few quarters will be key in shaping investor confidence.

Is Archer Aviation Stock a Good Buy?

Despite the stock’s steep decline after earnings, the Street’s analysts remain optimistic about the company’s prospects. Based on seven recent ratings, Archer Aviation boasts a “Strong Buy” consensus with an average ACHR stock price target of $12.43. This implies a 51.96% upside from the current price.

See more ACHR analyst ratings