Commuter air travel has always been something of a pipe dream. While small airfields and heliports capable of operating light aircraft and helicopters do exist, and those aircraft can easily carry 2 to 6 passengers with luggage, the costs have generally kept short-hop aerial commuting out of reach for the masses. That is beginning to change with the advent of electric vertical take-off and landing aircraft (eVTOLs).
Don't Miss Our End of Quarter Offers:
Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks.
New breakthroughs in areas such as battery technology and lifespan, air traffic management technologies, and autonomous navigation are combining to make short-hop air taxis both more feasible and less expensive. Aviation tech firms are actively pursuing solutions for the field, developing innovative designs for air taxis and even launching pilot projects in carefully targeted markets.
The market for these aircraft is small, which is not surprising for a field in its early stages, but it reached $1.7 billion last year. according to Research and Markets, the eVTOL market is expected to grow to $1.91 billion this year and to keep growing – with a CAGR of 12.6% – to reach $3.47 billion in the next five years.
Covering this niche for Cantor Fitzgerald, analyst Andres Sheppard has an upbeat view of the industry. Pointing specifically at Archer (NYSE:ACHR) and Joby Aviation (NYSE:JOBY), he lays out a clear case for the bulls and encourages investors to buy in. Let’s take a closer look.
Archer Aviation
First on our list today is Archer Aviation, a $3.8 billion eVTOL startup founded in 2018 – and now on the brink of commercialization. The company has designed a short-hop commuter air taxi, using all-electric propulsion, redundant battery packs and rotors, and featuring capacity for a pilot with four passengers plus luggage. This is more than just a ‘paper project;’ Archer’s aircraft, dubbed Midnight, already has prototypes flying and the company is progressing through flight test programs toward FAA regulatory approval.
Aviation is a notoriously expensive industry, and in addition to a workable aircraft, Archer has also developed working partnerships with larger companies. These partnerships include access to manufacturing facilities (with the automaker Stellantis), to civilian and military dual-use markets (with the defense contractor Anduril), and to airline connector routes (with United Airlines and its existing partners).
The most recent partnerships that Archer has entered were announced this past March. The first of these, with Palantir, focuses on developing the Palantir AI platform to work with the next generation of aviation technologies. Potential applications will include scaling of manufacturing capabilities along with air traffic control, movement control, and route planning software. Archer has also announced a partnership with the largest air carrier in Africa, Ethiopian Airlines. The partnership will aim to deploy a fleet of Midnight aircraft for air taxi route service in the region. Archer will provide Ethiopian Airlines with pilots, technicians, and engineers to operate and support the aircraft. This partnership, set up under Archer’s ‘Launch Edition’ program, is valued at $30 million. As part of their mutual development of air taxi operations, the two companies will also explore additional uses for the aircraft and routes, such as eco-tourism.
Archer’s Launch Edition program is aimed at commercialization of the Midnight aircraft, and the company has already taken steps on that path with its first customer, Abu Dhabi Aviation (ADA). ADA has plans to deploy a fleet of Midnight aircraft later this year, with pilot and tech support from Archer. For Archer, the Launch Edition program offers a route to commercialization and to spur product demand before receiving full FAA regulatory accreditation.
On the financial side, Archer is still a pre-revenue startup firm. The company reported a net loss in 4Q24 of $198.1 million. On a positive note, Archer finished 2024 with $834.5 million in cash and cash equivalents on hand.
For Sheppard, the bull case is clear. He notes that Archer’s partnerships have high potential, and that the Launch Edition program should provide a spur to commercialization activities. Sheppard writes, “We Remain Bullish on ACHR over the long-term. We continue to view the partnerships with Anduril (private), the Department of Defense (DOD), United Airlines, and Stellantis as important differentiators that should help the company ramp up its commercialization efforts, increase its TAM, and facilitate operations and manufacturing, respectively. We are also encouraged by the recent announcement to expand into hybrid VTOLs, which we see as a way for ACHR to de-risk its business, particularly if Type Certification with the FAA is delayed (since FAA certification is not required for military use). We continue to expect the U.A.E. to be the initial market for ACHR’s eVTOL commercialization, and we are encouraged by Archer’s Launch Edition program, given that management will target to commercialize in international markets ahead of FAA Certification.”
This long-term bullish stance comes along with an Overweight (i.e., Buy) rating, and a $13 price target that points toward a one-year upside potential of 83%. (To watch Sheppard’s track record, click here)
Archer gets a Strong Buy consensus rating from the Street, based on 7 recent analyst reviews that feature a lopsided 6 to 1 split favoring Buy over Hold. The shares are currently priced at $7.11, and their $12.83 average target price suggests that the stock will gain 80.5% in the year ahead. (See ACHR stock forecast)
Joby Aviation
The next Cantor stock pick we’re looking at is Joby Aviation, one of Archer’s peers at the leading edge of commuter aviation and eVTOL technology. Joby is notable for becoming, in 2020, the first eVTOL company to receive an airworthiness approval rating from the US Air Force.
Like Archer above, Joby has developed and put into prototype production a multi-rotor, multi-battery eVTOL aircraft. The full-scale prototype is currently undergoing flight testing, on the way to regulatory certification from the FAA and other global aviation oversight agencies. Joby boasts that it has already flown more than 30,000 miles in its test program. Joby’s aircraft, with its six independently powered electric tilt rotors, was originally designed to cover the route between New York’s JFK airport and the downtown heliport on Manhattan Island, while carrying up to four passengers.
Joby is preparing for commercialization efforts, including the development of a production-scale manufacturing facility located in Marina, California. The company has additional offices in Santa Cruz, San Carlos, Washington DC, and Munich. In February of this year, Joby announced that it was progressing on stage four of the FAA’s 5-stage regulatory process and had delivered a second test aircraft to the USAF at Edwards Air Force Base. Joby’s flight test fleet now includes five aircraft – and one of these is a hybrid aircraft capable of running on hydrogen fuel.
In another parallel to Archer, Joby is planning to pursue its initial commercial routes in the United Arab Emirates. The company has plans to deliver its first operational passenger aircraft to Dubai in the middle of this year, with the goal of completing flight testing and opening up passenger routes during 4Q25 or 1Q26.
Looking ahead, Joby expects that its operations during 2025 will cost between $500 million and $540 million. The company has deep pockets to cover this, however; it finished 2024 with $933 million in available cash and liquid assets. Management took care to note that the total did not include upcoming investments from Toyota, related to a manufacturing partnership, which will total an additional $500 million.
When we check in again with analyst Sheppard, for the Cantor view, we find that he is upbeat on Joby and not shy about listing reasons. Sheppard says, “We remain bullish on JOBY over the long term, and we are encouraged by the company’s plans to enter into service and to carry its first passengers in Dubai by 4Q25/1H26. Additionally, JOBY continues to have the strongest liquidity position in the industry with ~$933M in cash and equivalents as of 4Q24 (~$1.4B in total liquidity inclusive of Toyota investment). JOBY is Partnered with Toyota for production, Delta Air Lines for operations, and the DoD, which we continue to see as meaningful differentiators. While we don’t expect Type Certification till at least 2026, we are also encouraged by JOBY’s opportunity to continue to leverage its partnership with the DOD and explore additional opportunities with the military.”
Once again, the Cantor analyst gives an eVTOL startup an Overweight (i.e., Buy) rating, and his $9 price target implies a one-year gain of 49.5%.
Joby has picked up 7 recent analyst reviews, which include 5 to Buy and 2 to Sell, giving the stock its Moderate Buy consensus rating. The shares have a trading price of $6.02, and their $8.92 average target price suggests an upside of 48% on the one-year horizon. (See JOBY stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
