Could I double my money if I buy at this Aston Martin share price?
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- Aston Martin Core wholesale increased by 82%
- The company nearly doubled its revenue in FY2021
- Plans to launch its first electric vehicle in 2025.
The Aston Martin (LSE:AML) share price is down by over 50% in the past year. And in 2022 alone, the stock is down over 30%. Will it continue its downward momentum, or should I buy this stock now to double my money?
This business was admitted to the London Stock Exchange in October 2018. Since its admission, the Aston Martin share price has lost over 90% of its market value. Needless to say, this has been a tough time for its shareholders. But, it seems things could be about to change, which might cause the stock to explode. Let’s take a closer look.
FY 2021 results
In the words of the company CEO, Tobias Moers, “2021 was a year of extraordinary progress for Aston Martin. Executing on Project Horizon, we made considerable changes throughout the company and are now operating as an ultra-luxury brand.”
The performance of the British luxury carmaker was very encouraging for me. And in my opinion, it may soon improve investors’ sentiment towards Aston Martin and its share price. The company delivered over 6,000 core wholesale sales. This is a mouthwatering increase of 82% versus a year ago, which led the group to nearly double its revenue! Meanwhile, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) improved significantly as well as free cash flow.
Equally interesting for me is that the company introduced cost savings initiatives last year. And has further set more manufacturing cost saving targets for 2022. This could undoubtedly improve Aston Martin’s profitability and subsequently its share price over the long term. Furthermore, the management also brought in new talent to strengthen its commercial, technical and operational team as it transforms into a tech-orientated business.
So, with that in mind, could I double my money if I buy Aston Martin stock at today’s share price?
What’s next for the Aston Martin share price?
As a potential future shareholder of Aston Martin, I am quite satisfied with the transformation drive of the company. In my opinion, this will create value for investors in the future. The firm unveiled its DBX707 luxury SUV on 1 February 2022 and is expected to start delivery from the second quarter this year. This release shortly followed the launch of the new Aston Martin Valkyrie at the end of last year. All these put one thing in my mind, the company seems serious about its transformational drive.
But as encouraging as the group’s progress has been, there remain several challenges ahead.
Risks to consider
While I like the changes going on in the company, the luxury car space is very competitive. Aside from that, the company added to their already sizable debt in 2021.
While both of these threats could adversely impact the Aston Martin share price, my primary concern is its relatively slow adoption of electric vehicle technology. The company launched a hybrid DBX model in China last year. And plans on delivering its first plug-in hybrid electric vehicle (PHEV) in early 2024, along with a battery-electric vehicle (BEV) in 2025. However, this may be too late, with many competitors already establishing themselves within this space today.
Final thoughts on the Aston Martin share price
All things considered, I believe the Aston Martin share price has the potential to double over the long term. But there remains a lot of unknowns surrounding this business, which is currently trying to turn itself around under new leadership. With that in mind, I’ll be keeping this stock on my watch list for now.
Learn more about Aston Martin…
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Prosper Ambaka does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.
Originally published at https://themoneycog.com.
