Why Archer Aviation Stock Just Jumped 9%
Key Points
Archer Aviation reported Q2 revenue of $5 million, beating Wall Street expectations by more than 150%, while its adjusted loss of $0.23 per share also topped estimates.
Boeing is selling three businesses to Archer -- Insitu, Wisk, and SkyGrid -- in exchange for a roughly 20% stake in the eVTOL developer plus stock warrants.
Insitu reportedly generates $200 million in annual revenue and is profitable, but full audited financials haven't been released, leaving key questions unanswered.
Archer Aviation (NYSE: ACHR) stock was up more than 9% as of 12:59 p.m. ET Tuesday. Markets were down slightly, with the S&P 500 falling 0.2% and the Nasdaq Composite losing 0.5%.
Shares of the electric vertical takeoff and landing (eVTOL) developer are flying higher following the release of its latest earnings report and the announcement of a major deal with aviation giant Boeing.
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Archer beats Wall Street's expectations
Archer's Q2 earnings, released after yesterday's close, beat Wall Street's expectations handily. The company reported revenue of $5.0 million, more than 150% higher than analysts had targeted, and the company's adjusted earnings per share (EPS) came in at a $0.23 loss, better than the expected 25-cent loss per share.
Image source: Getty Images.
Archer and Boeing announce a major new deal
On Monday, news broke that Archer intends to buy three businesses from Boeing in exchange for a roughly 20% stake in Archer and additional stock warrants:
- Insitu, a defense tech company that makes surveillance and reconnaissance drones.
- Wisk, a developer of autonomous and unmanned airtaxis.
- SkyGrid, a developer of software for unmanned flight.
Though the full, audited financials have not been released, Archer says that Insitu brings in $200 million in annual revenue and is profitable.
Should you buy Archer Aviation stock?
The new deal could reshape Archer's finances -- $200 million in annual revenue is a huge improvement. But just how much this changes things depends on the full financials. We don't know what "profitable" means at this point. This could mean its core operations are profitable, but not overall, which would introduce additional strain on the company's cash reserves.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool has a disclosure policy.