Simply once you suppose Aston Martin Lagonda (LSE: AML) shares can’t go any decrease, they do. Now at 66p, they’re down 39% in six months, 56% over a 12 months, and 98% since itemizing in late 2018.

The share price pattern appears so bearish that any optimistic information in any respect may spark a sudden turnaround. Due to this fact, I’ve been digging into the FTSE 250 struggler once more to see if it is likely to be value me shopping for a couple of shares for my ISA.

High model

There are some things that I like about Aston Martin. The obvious is the posh model, which exudes British refinement and elegance. Little doubt James Bond immortalised that picture in folks’s minds.

Additionally, the model has a loyal following. And though it’s not as widespread as Ferrari or Lamborghini in rising markets, I see no cause why the British luxurious carmaker can’t ultimately attraction to wealthy folks in every single place. The Aston Martin title additionally competes in Formulation 1 these days, which is nice for ongoing international model recognition.

One other factor I like right here is new(ish) CEO Adrian Hallmark. Previous to becoming a member of Aston Martin, he served because the boss of Bentley for plenty of years, the place he led the corporate by way of a major turnaround. After a revolving door of chief executives, the agency would possibly lastly have discovered the appropriate match.

Lastly, the inventory appears to be like low-cost, buying and selling at simply 0.39 instances gross sales. If the loss-making agency can swing to profitability sooner or later over the following few years, the share price may take off like a rocket.

Stability sheet issues

Sadly, there are some things I don’t like. The principle one is that web debt elevated by 43% final 12 months, rising from £814m to £1.16bn. For context, the agency’s market cap is barely £626m.

The corporate’s adjusted web leverage ratio rose from 2.7 to 4.3, reflecting each increased debt and decreased EBITDA attributable to decrease gross sales. Administration goals to scale back this considerably over the medium time period, however this subject merely can’t be ignored.

And whereas the agency aspires to be free money circulation optimistic within the second half of 2025, precise income appear a distant prospect. This lack of profitability places me off, particularly when mixed with the hefty debt.

On high of this, the corporate is dealing with sluggish gross sales in China and the prospect of steep 25% tariffs within the US. Even when the UK authorities negotiates a commerce cope with the US, there isn’t a assure that every one automobile tariffs will likely be lifted totally.

My transfer

Aston Martin has been promising a turnaround and worthwhile future for a few years. But it’s usually been one step ahead, two steps again relating to really delivering the products.

I already maintain shares of Ferrari in my portfolio. Whereas it may appear unfair to check the 2 companies, Aston Martin stated it aspired to emulate the long-lasting Italian automaker previous to its 2018 IPO. So it appears acceptable to take action after seven years.

As we will see, there actually is not any comparability. I’d be open to investing in one other luxurious items firm, however sadly not Aston Martin, as issues stand.