Archer Aviation Inc (NYSE: ACHR) has been named the official air taxi provider for the LA28 Olympics. Shares of the eVTOL company are up 10% at the time of writing.
ACHR’s electric vertical take-off and landing vehicles are now slated to be used in several ways, including transportation of VIP guests, fans, and stakeholders at the LA28 Games, a press release confirmed on Friday.
Including today’s gain, Archer Aviation stock is up more than 100% versus its year-to-date low.
Archer Aviation stock has a trillion-dollar opportunity
Archer Aviation is increasingly becoming a key name in the fast-growing air taxi market that many believe will be worth more than a trillion-dollar over the next few years.
ACHR shares continue to attract investors this year as the company is playing it smart.
On the one hand, it’s committed to commercial applications of the eVTOLs – while on the other, it’s working with the defense sector as well.
Together, this dual-focused approach could help Archer Aviation grow its annual revenue into the billions by the end of this decade. Note that ACHR stock is already trading at a multi-year high at writing.
ACHR shares could benefit from recent partnerships
Archer Aviation is an exciting pick for exposure to urban air mobility, also because it’s not the one to paint a rosy picture of what the future “may” look like.
It has the numbers to substantiate that it’s working diligently towards that future.
For example, the NYSE-listed firm currently has a backlog of some $6 billion, signalling strong demand for its eVTOLs.
Plus, it has teamed up with notable names like Anduril Industries and even the market favourite, Palantir Technologies, in a show of its commitment to transforming the way people get around a city.
ACHR’s team up with Palantir is particularly thrilling since it aims at revolutionising aviation logistics with the use of artificial intelligence, which could unlock extraordinary upside for Archer Aviation stock over time.
What Archer Aviation’s current valuation tells us
A $6 billion order book makes Archer Aviation stock grossly undervalued at current levels since a multiple of just 2x on that backlog makes ACHR worth $24 a share at least, indicating potential upside of another 80% from here.
What’s also worth mentioning is that a 2x multiple is unusually conservative for high-growth tech names, which Archer Aviation is by all means, especially after its team-up with Palantir.
It’s fairly common for high-growth tech companies to command a multiple of 5x or even 10x their estimated revenue.
That’s part of the reason why Cantor Fitzgerald reiterated its bullish view on ACHR shares after the LA28 Olympics news on Friday.
The urban air mobility specialist does not currently pay a dividend, though.
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