Aston Martin (LSE:AML) shares offer investors the chance to own a small slice of James Bond’s favourite car brand. And as everyone knows, 007 has great taste when it comes to these things.
However, the five-year share price chart doesn’t match the quality of the FTSE 250 company’s sportscars or the brand’s sophisticated image. We’re looking at an 88% car crash over this period!
Unfortunately, recent performance doesn’t look much better. Since the start of 2025, the Aston Martin share price has dropped 41%, turning every £5,000 invested then into less than £3,000.
Adding salt to the wound, there have been no dividends because Aston Martin’s unprofitable and doesn’t pay them.
But has the selling now gone too far?
A challenge-filled year
Most of this year’s share price damage was done in February when the firm released its preliminary 2024 results. In these, management flagged weak demand in key markets like China, before lowering 2025 guidance to “mid-single-digit percentage total wholesale volume growth“.
This outlook disappointed investors, sending the stock crashing. Another thing that spooked the market at the time was US tariffs. This fear has subsided somewhat following the US-UK trade deal agreed in May.
A second big drop came in October when Aston Martin said total wholesale volumes for 2025 would decline by “mid-high single digits“. It blamed weaker-than-expected demand in both Asia Pacific and North America, where there was a continuing tariff impact.
For the first nine months of the year, the company’s pre-tax loss was £253m. Meanwhile, net debt increased 14% year on year to almost £1.4bn, adding significant risk for investors considering this stock.
Uncertain EV future
Stepping back, there’s almost everything you wouldn’t want to see here. Weak demand, lowered guidance, rising losses and debt levels, and uncertainty around when things might improve.
Another negative for me is the company’s uncertain electrification strategy. In 2022, Aston Martin said it planned to have its first EV on the road this year, and for its entire core portfolio of GT sports cars and SUVs to be fully electrified by 2030.
But in 2024 the firm delayed the launch of its first EV by one year. Now, it has pushed the entire project back to the “latter part of this decade“.
The reality is there just isn’t strong demand for electric sportscars. We know this because Ferrari recently scaled back plans to make 40% of its lineup fully electric by 2030. The Italian company now sees just 20% being EVs due to a lack of demand from its uber-wealthy clients.
Bargain stock?
Aston Martin’s price-to-sales ratio is very low (just 0.45). But with sales under pressure, I think the low multiple’s justified.
As for the bottom line, Aston Martin expects FY 2026 profitability and cash flow to “materially improve“. The new hybrid supercar Valhalla should certainly help, as it reportedly costs well over £1m after customisation through Aston’s Q programme.
If profitability improves in 2026, the stock could get a significant boost. Unfortunately though, the carmaker has long over-promised and under-delivered. So I won’t bank on it.
I hope Aston Martin turns things around as it’s sad to witness an iconic British brand so out of favour. But I see far better buying opportunities elsewhere in the FTSE 250.
