Aston Martin Lagonda (LSE:AML) has been among the worst stock market investments someone could have made in modern times. After listing to much fanfare in 2018, the luxury carmaker has lost almost all its market value. Literally.
Yet with Aston Martin shares trading at 38p and the company valued at less than £400m, a sustained increase in buying pressure could help drive a sharp rebound.
Indeed, a 70% rally would only take it back to levels from a year ago. And if Aston Martin returned to where it was three years ago, eagle-eyed investors buying today would see a return of about 450%.
So is the stock worth thinking about as a high-risk/high-reward recovery play? Let’s take a look at Aston Martin’s Q3 results released today (28 October) to try and form a better picture.
High-level progress
At a high level, there was a lot to like here, in my opinion. Q3 revenue rose 36% to £388.7m, bringing year-to-date revenue above £1bn. Notably, gross margins reached 35%, up from 28% in the first nine months of 2025.
Free cash outflow improved dramatically in the quarter, from £94m to £27.6m. This shows Aston Martin’s moving towards actually generating cash rather than losing it all the time.
By the end of September, the company had achieved around 350 Valhalla Coupe deliveries, putting it on track for 500 this year. And it’s just launched the exclusive Valhalla Spider (a roofless version of the £1m+ hypercar), with deliveries commencing in Q3 2027.
Driven by these high-margin ‘Specials’, the total average selling price in Q3 surged 38% to £247k. Demand for unique product personalisation among well-heeled customers remains strong.
Finally, Aston Martin has just launched the 214mph Valen, the world’s most powerful front-engine production car. I read the starting price here is £1.5m — with bespoke extras taking that to around £2m! It’s an astonishingly sleek vehicle, in my eyes.
So why isn’t the stock up?
Overall then, the company’s transformation programme is definitely showing progress. However, as I type, the share price is actually down 0.5% to 37p. What’s going on?
One issue is that while Q3 revenue was slightly higher than anticipated, EBITDA (earnings before interest, taxes, depreciation, and amortisation) of £69.9m missed expectations for £72.9m.
Also, full-year guidance was maintained rather than lifted. As a reminder, this is for broadly flat total wholesale volumes (5,448) and gross margins in the high-30% range.
Worryingly, net cash interest is expected to be around £160m, up from £143m last year. This is cash leaving the business to service its huge debt pile (gross debt climbed to £1.9bn). Note that the year-to-date pre-tax loss barely budged, at £231m.
Finally, the firm warned about unpredictable US tariffs, the Middle East conflict, volatile supply chains, and changes to China’s ultra-luxury car taxes. So there’s plenty of uncertainty preventing a share price rally from developing.
Final thoughts
It’s encouraging to see the transformation programme bearing fruit. But the Valhalla is doing most of the heavy lifting, and there are only 999 of these being made (and just 150 Valen units). I worry the Specials boost might not be sustainable beyond 2027.
For me, there’s still too much risk here to invest. So I’ll continue admiring the cars rather than buying the shares.
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Ben McPoland has no position in any of the companies mentioned.
This story originally appeared on Motley Fool
