Aston Martin (LSE: AML) shares briefly perked up Wednesday (25 February) after the luxury car maker posted 2025 full-year results. At the time of writing they’ve dipped around 0.5% — but after a 99% crash since IPO, I’d actually rate that a win. What makes me see sparks of optimism here?
It’s just one thing, which is easy to miss in a sea of potentially scary numbers. But it might be key. The company said: “Improved cash collections in Q4 2025 resulted in modest positive free cash flow in Q4 2025.”
Shareholders have been dreaming of positive cash flow. Now, it was only £5.1m in the final quarter. And the full year did see a cash outflow of £410m. But against international tariff turmoil, I didn’t think Aston Martin was going to achieve its year-and cash flow hopes. Is this finally the start of something good?
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Don’t get too excited yet
CEO Adrian Hallmark spoke of “an unprecedented backdrop of geopolitical uncertainties and macroeconomic pressures, including heightened tariffs in the U.S. and China“, in a “highly challenging trading environment“. Right now really isn’t the best of times for a struggling high-end car company to be trying to make a comeback.
He went on to say: “In FY 2026, we expect to deliver a material improvement in financial performance and continue delivering year-on-year improvements over the short-mid-term with a focus on margin expansion and cash flow generation.“
That would be good, for sure. But the pessimistic side of me sees a clear possibility that the company is putting the best possible spin it can on a dire situation. The long-term future for Aston Martin shares will depend on profit. And there’s none of that.
When will profit come?
A £259.2m operating loss for 2025 is 161% more painful than the £99.5m loss the year before. At least we saw only a 26% worsening in the year’s loss before tax, to £363.9m from £289.1m. But that hurts. And net debt rose another 19%, to hit £1.38bn.
Forecasters expect no profit in the next couple of years. But they see the loss per share halving in 2026. And halving again in 2027. We could be getting dangerously close to profit. The trouble is, I see a tricky balancing act between now and then.
How long will the £250m liquidity on the books in December last? What extra cash will Aston Martin need? How much dilution will shareholders face? Those are all big unknowns.
Worth the risk?
Part of me thinks that if it all turns round as hoped, there could be some juicy profits for investors who take the plunge now. I think they’d face a scary ride… though car enthusiasts might like that kind of thing.
But I also see a chance Aston Martin shares could fall to zero. The company could go bust. It has form for that. Except for those who like to live dangerously, I think investors should consider safer alternatives.
This story originally appeared on Motley Fool
