Jim Cramer Rejects ACHR: "No Earnings Power"
Jim Cramer, the outspoken host of CNBC’s Mad Money, recently made a firm statement about Archer Aviation (NYSE: ACHR), warning investors against the electric vertical takeoff and landing (eVTOL) startup. "It has no earnings power," Cramer declared, signaling his reluctance to recommend companies that continue to burn through cash without clear profitability on the horizon. His comments have reignited investor concerns about speculative tech and aerospace plays in 2025.
Archer Aviation's Financial Reality
Archer Aviation reported a net loss of $95.7 million in Q4 2024, continuing its trend of operating in the red. The company is still in its development phase and has yet to generate meaningful revenue from commercial activity. While heavy losses are not unusual for companies pioneering new technologies, the absence of any short-term earnings visibility raises red flags for risk-averse investors.
Optimism from Analysts, But With a Caveat
Despite Cramer’s warning, some analysts still see potential in Archer’s long-term story. The average 12-month price target currently sits around $11.61, suggesting a possible upside of over 55% from current trading levels. This bullish sentiment hinges on the successful rollout of its Midnight aircraft, expected to begin commercial deployment once the company receives FAA certification. However, any delays in regulatory approvals or production timelines could quickly erode that optimism.
The eVTOL Market Is Promising — But Still Unproven
The urban air mobility space is buzzing with potential, and Archer is one of the few companies positioned to lead the charge. Its technology promises to revolutionize short-distance travel in urban environments by reducing traffic congestion and lowering emissions. But the road to profitability in this sector is steep, with high costs, complex regulation, and untested consumer demand standing in the way.
Should Investors Stay Away?
Jim Cramer’s dismissal of Archer Aviation underscores a broader shift in investor sentiment away from speculative, pre-revenue companies. In a market where earnings and cash flow are king, startups like ACHR must prove they can survive long enough to capitalize on their innovation. For now, Archer remains a high-risk, high-reward bet — one that may not suit every portfolio.