Image source: Aston Martin
The company is famous for its fast cars. Aston Martin Lagonda (LSE: AML) has been heading speedily this year – in the wrong direction. The Aston Martin share price is down by over two-fifths since the start of 2025.
Bad as that sounds, long-term Aston Martin shareholders have become used to bad news. Over five years, the share price has tumbled by 92%.
So, could this be a possible recovery stock to consider for my portfolio as we head into 2026?
Looking under the bonnet
At face value, Aston Martin seems like it has the potential to be a great business.
The company owns a luxury marque that has been the talking point of petrolheads for decades. Its customer base is well-heeled and it can command a very premium price for its cars.
Yet despite that promising foundation, as a listed company Aston Martin has been a money pit.
There are a number of reasons for that, but they boil down to one fundamental problem. Despite selling cars for a pretty penny, the company has continued to push more cash out the door than it brings in.
2025 has been a year of hope – and disappointment
There was good news this year when it came to that problem of negative free cash flow.
While the company did not actually turn cash flow positive, it did at least say it expected free cash flow generation in the second half of the year.
I was sceptical given the company’s long history of disappointing shareholders, but thought the Aston Martin share price could soar if the company did indeed turn free cash flow positive.
Instead, what happened, was that the company later said it no longer expected to meet that target.
There are some reasons that can help explain that. They include uncertainty about international tariffs and weak customer demand in China. But I like a company that delivers results, not excuses.
There always seems to be some reason why Aston Martin is not delivering jam today while dangling the prospect of jam tomorrow. But its long-term share price collapse tells its own story.
Can the company turn the corner?
Still, all is not lost.
Aston Martin remains a strong brand with its well-heeled customer base. It expects next year’s cash flow to “materially improve” compared to this year.
After its horrible long-term performance, I think there are a couple of key factors that could potentially move the Aston Martin share price upwards if they occur.
One is getting to positive cash flow. That would still leave the company with a large pile of debt that needs to be serviced, but it would at least mean the balance sheet was no longer getting worse.
A more modest driver could be as simple as management setting realistic goals for 2026 and delivering on all of them. That could boost credibility and help lift the share price, even if the company is still bleeding cash.
But with so many moving parts and a business model that has not been proven when it comes to generating cash, Aston Martin remains far too risky for my taste. I will not be investing.
This story originally appeared on Motley Fool
