Why Cathie Wood Just Massively Sold Archer Aviation Stock

Valuation remains another point of debate. ACHR stock is currently trading at 427.15 times forward sales, a premium that sits well above the industry average and signals that investors still place substantial value on the company’s future growth prospects despite recent setbacks.

A Closer Look at Archer Aviation’s Q1 Earnings

Archer Aviation reported Q1 FY2026 revenue of $1.6 million on May 11. The figure improved 433.3% from Q4 2025 as the company expanded operations at Hawthorne Airport in Los Angeles. While revenue moved higher, management continued pouring capital into key programs designed to move its commercial ambitions closer to reality.

Those investments showed up clearly across the income statement. Operating expenses climbed to $256.2 million, increasing 77.9% year-over-year (YOY) and 9.2% from Q4 2025. The company directed additional spending toward aircraft development, certification work, flight testing activities, Midnight production efforts, and the advancement of its hybrid aircraft program.

The elevated spending environment continued to pressure profitability as well. Net loss widened 133.1% YOY to $217.7 million, while net loss per share increased 64.7% from the prior year period.

Plus, adjusted EBITDA loss totaled $172.5 million, landing within management’s guidance range of $160 million to $180 million. Compared with Q4 2025, the loss increased by 25.1%, reflecting higher operating activity across the business. Adjusted EBITDA loss widened by 58.3% YOY.

Management noted that Q1 also marked the most expensive period yet for its flight-testing program. Piloted VTOL and CTOL flights took place across the company’s expanded Midnight fleet on a near daily basis, with multiple flights often occurring throughout a single day as testing activity intensified.

Even as spending accelerated, Archer maintained a formidable financial cushion. The company ended the quarter with $1.8 billion in cash, cash equivalents, and short-term investments, alongside $7.3 million in restricted cash. Such a liquidity position provides substantial flexibility as certification and production efforts continue to ramp up.

Beyond the financials, Archer achieved a significant regulatory milestone during the quarter. The company became the first eVTOL developer to complete Phase 3 of the Federal Aviation Administration’s four phase type certification process. At the same time, Archer continued advancing portions of Phase 4, keeping regulatory momentum firmly intact.

Looking ahead, management expects adjusted EBITDA loss in Q2 FY2026 to range between $170 million and $200 million.

On the other hand, analysts do not expect Archer’s losses to ease anytime soon. They forecast Q2 FY2026 loss per share to widen 5.6% YOY to $0.38. For FY2026, loss per share is projected to expand 48.5% from the prior year to $1.47 before narrowing 8.8% to $1.34 in FY2027.

What Do Analysts Expect for Archer Aviation Stock?

Despite trimming its price target to $12 from $13, Canaccord Genuity analyst Austin Moeller continues to back Archer Aviation with a “Buy” rating, signaling confidence in the company’s long-term prospects despite near term challenges.

Wall Street remains cautiously optimistic as well. Archer currently carries a “Moderate Buy” overall rating. Among the 10 analysts covering the stock, four recommend “Strong Buy,” two rate it “Moderate Buy,” and four advise investors to “Hold” their positions.

Analysts also see room for upside ahead. The average price target of $10.61 implies potential upside of 105.2% from current levels. The most bullish view comes from H.C. Wainwright analyst Amit Dayal, whose Street-High target of $18 points to potential gain of 248.2% from current levels.

On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com