Shares of air mobility specialist Archer Aviation (NYSE:ACHR) moved up modestly on Thursday following a significant announcement. Earlier this morning, management revealed that the company’s Midnight electric vertical takeoff and landing (eVTOL) aircraft won a major industry honor for its innovative design. Subsequently, the news builds upon the rising credibility of ACHR stock as a leader in the new mobility paradigm.
According to the official press release, Archer announced that the MUSE Design Awards — an international design competition — recognized the Midnight aircraft as the “Transportation Design of the Year.” Notably, Archer benefited handsomely from world-class design professionals led by Julien Montousse, former Head of Design at Mazda’s (OTCMKTS:MZDAY) North American division.
As well, the design team includes Niki Smart, who reshaped the Cadillac lineup at General Motors (NYSE:GM) and Greg Warmsley, former Mazda Executive Creative Director. Per the statement, the members “broke boundaries of aerospace design with its Midnight aircraft, which intends to unlock the skies bringing the future of movement to reality.”
What’s particularly remarkable about the achievement is how quickly the designers leveraged their automotive experience into the burgeoning eVTOL field. Montousse stated that when crafting the Midnight’s elegant frame, the designer did so to “instill confidence and earn the trust of consumers.”
ACHR Stock May Benefit From a Credibility Boost
On the surface, winning top industry honors — while ego-boosting — might not seem particularly practical for ACHR stock. After all, as exciting as the eVTOL market is, it’s still a burgeoning industry. Further, several hurdles await, from regulatory headwinds to lingering questions about consumer adoption. Myriad factors could suddenly crimp the sector before it has a chance to take off.
Moreover, while ACHR stock enjoyed a robust turnaround performance this year, it still has hurdles to overcome. It’s worth pointing out that since its public market debut, shares are still down about 37%. Also, Archer is a pre-revenue enterprise, meaning that investors must rely mostly on narratives rather than financial substance.
That said, the primary catalyst for ACHR stock regarding the MUSE award centers on the credibility boost. Just by this well-recognized achievement alone, Archer should benefit from increased brand awareness and market visibility. Further, the attention could draw in more investor dollars, which would be particularly valuable given the relatively novel industry.
Further, evidence from the automotive market to the small-business community indicates that the uptick in recognition is more than theoretical. For instance, automobiles that win industry awards often experience a sales surge. And small businesses can see double-digit gains in revenue from winning outside recognition.
Why It Matters
Currently, ACHR stock carries a consensus strong buy rating. However, the most recent assessment came in as a “hold” from Barclays’ David Zazula. As well, the expert anticipates that shares will only rise to $6.50, implying about 4% upside.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
