Electric vertical takeoff and landing aircraft manufacturer Archer Aviation (NYSE:ACHR) reported first-quarter earnings last week. But that’s really a misnomer. Because Archer Aviation stock represents a startup and is helping to build an industry out of nothing, earnings are less of a factor.

The eVTOL stock has no revenue to speak of, other than getting occasional cash infusions from partners or from contracts when it reaches a milestone. So actual earnings (or losses, really) end up being based upon whatever expenses it has during the quarter and whether those were higher or lower than anticipated.

For Archer Aviation, it reported $142.2 million in expenses for the period, a near-60% increase from the year ago. That resulted in a loss of 36 cents per share for the period, 3 cents worse than the 33 cent-loss analysts were anticipating.

But that doesn’t mean much. Because Wall Street really doesn’t have much insight into the eVTOL industry or the costs a company will incur as it ramps up production to get Federal Aviation Administration certification, analysts are flying blind as much as everyone else.

Investors shouldn’t ignore the reports before buying Archer Aviation stock, but they are not quite the same as for an established company.

Building up Goodwill

Archer is paving the road ahead for successful commercialization. Beyond just securing the necessary regulatory certifications, the eVTOL company is bringing partners into the fold that will ensure it can take flight at the right time. We saw this same story play out after the last earnings report.

We know Archer already has automaker Stellantis (NYSE:STLA) as an important strategic and financial backer. It is helping finance the cost of its manufacturing facility, saving Archer precious millions of dollars to deploy elsewhere.

Stellantis will also be its contract manufacturing partner, lending its expertise in building vehicles at scale.

It is also lining up Abu Dhabi as a key hub for future operations. It signed a memorandum of understanding with the country’s investment arm to funnel hundreds of millions of dollars into the company to launch an air taxi service there.

Now an MOU isn’t a contract so no funds are flowing to Archer from it but it indicates the level of interest in bringing this industry to life.

In that regard, Archer isn’t winging it in the country. It is not creating an industry out of whole cloth there as it is in the U.S.

Rather, it is partnering with existing companies to use their local expertise, such as Falcon Aviation and Air Chateau, a local helicopter service, to build on rather than compete against.

Where ACHR is Going, Not Where It Is

The take-away for Archer Aviation investors is more direction over location. Is the eVTOL stock heading in the right direction rather than where it is on the continuum? The numbers are important but not particularly critical.

Right now it seems it is moving forward according to schedule and should be ready for commercialization next year as planned. But that also means before buying Archer Aviation stock, investors should have their eyes wide-open to potential unforeseen problems developing overnight. 

On the earnings conference call, JPMorgan analyst Bill Petersen hinted at delays Archer encountered with achieving piloted flight testing. Based on commentary Archer made last year, he expected the eVTOL company would have been at that stage already.

Archer didn’t dispute that but said the process is moving forward and the company should reach that stage in the next few months.

Is Archer Aviation a Buy?

I’ve seen nothing in these reports to indicate there is anything to worry about. It has an order book for hundreds of aircraft when it wins certification, but pre-revenue startups in a nonexistent industry are going to be risky investments. The stock will be volatile because there is nothing concrete yet to hang your hat on.

For risk-averse investors, ACHR stock is not for you. For those with heightened risk tolerance, I think Archer Aviation could be a winning investment — eventually.

On the date of publication, Rich Duprey did not hold (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.