Archer Aviation Inc. (NYSE: ACHR) stock is up more than 2.7% after a bullish analyst rating. Edison Yu of Deutsche Bank reiterated his bullish rating on the flying car company. In doing so, Yu also maintained his price target of $12 for ACHR stock. That would be a 140% increase from the stock's 167% gain in 2023. 

Archer manufactures electric vertical takeoff and landing (eVTOL) vehicles. Along with Joby Aviation Inc. (NASDAQ: JOBY), Archer is among the leading names in the flying car sector. It's a new sector that doesn't fit neatly with automotive or airline stocks. It doesn't seem to be weighed down by the disillusionment with electric vehicle stocks. 

As part of his bullish call, Yu cited the company's strong cash position, which makes it more likely the company won't need to raise capital before production starts. However, there's a difference between hope and hype. So here are some important things to know before you invest capital in ACHR stock. 

Archer is still a pre-revenue company 

As for the company itself, Archer is not yet profitable and pre-revenue. However, that will be changing for the better. The company has a $140 million contract with the U.S. Air Force. The contract is for 600 of Archer's Midnight production aircraft. Midnight is a pilot-plus-four-passenger eVTOL aircraft. 

The company also partners with United Air Holdings Inc. (NYSE: UAL). The companies are building out Archer's strategy to launch "trunk" routes from an airport to a city center. The first example would be having the ability to fly from Newark Airport to New York City in 10 minutes. According to the company, "known demand and strong willingness" for such a service exists. 

Getting involved with ACRH stock 

As pointed out in the introduction, Archer's stock has been a phenomenal outperformer in 2023. However, whether you're sitting on a profit or a loss depends on when you got in on the trade. ACRH stock is down 13.5% in the last three months as of the end of trading on November 13. But if you were a shareholder at the beginning of the year, you're up 166%. 

However, for shareholders who are on the sideline or only now becoming familiar with Archer, what's the play? For starters, you should be aware of heavy options activity in the stock in the next two months. Open interest on the January 19, 2024, $5 call option is over 15,000. That means many traders and institutional investors are building long positions in ACHR stock. 

On the other hand, the stock has a healthy degree of short interest. As of this writing, it's over 29.5%. That's supported by one short-seller report that suggests the company may not be ready for mass production until well beyond the company's stated goal of 2028. On the other hand, any positive news on that front could make the stock a candidate for a short squeeze. 

All of this is to say that the short-term price action in Archer is likely to have little connection to any fundamentals. That's the case with many pre-revenue stocks. Buy-and-hold investors have time to build their positions slowly, especially as price action will likely be choppy over the next few months.