Is there a unique opportunity to gain wealth by investing in Aston Martin shares?

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Aston Martin stocks stand out in the UK as there are no other British automobile companies listed on the FTSE 350. Unfortunately, this highlights the decline of an industry that was once a major employer of thousands in Britain.

In recent news, the stock made quite a buzz due to its surprising positive results. Additionally, investors found worth in Fernando Alonso's performance in the Bahrain Formula 1 race.

Nevertheless, Aston Martin's stocks have yet to recover from their initial drop of 84% since their launch, despite recent gains.

Is it possible for Aston Martin's stocks to bring me wealth? Shall we examine the matter?

During the beginning of March, Aston Martin showcased a better report that caught the attention of investors. Although the company experienced a loss of £495 million before taxes, it managed to attain a small operating profit of £6.6 million in Q4.

At the same time, there was a 31% increase in gross profit compared to the previous year, making it £451 million. Additionally, the gross margin also improved by 2%, which reached up to 33% due to better pricing and an enhanced gross margin for crucial models.

The findings indicated that the company's situation was improving. The executive chairman, Lawrence Stroll, has redirected the company's efforts towards producing high-profit cars for the super-luxury market. The DBX model is a significant part of this strategy.

Stroll's goal is to achieve a revenue of £2bn and an adjusted EBITDA of £500m by 2024/2025. Nevertheless, shareholders have not been persuaded.

However, there is a positive outlook, and from my perspective, I am becoming more assured that the company will achieve its objective. During the annual report released in March, the finance director, Doug Lafferty, expressed his high level of certainty in reaching the set targets for the year 2025.

The company aims to achieve its monetary goals for 2024 and 2025 by selling only 8,000 automobiles each year, which is lower than the original target of 10,000 set by Stroll. In 2022, a total of 6,412 cars were sold.

Last year, when Amedeo Felisa, the previous leader of Ferrari, was appointed as CEO, it could be seen as an exceptional move. This luxury Italian brand is highly regarded for its substantial profit margins, earning a remarkable $106,078 for every unit sold in 2021.

For Aston to bounce back, it's important to focus on attaining better profit margins. The amount of Valkyries delivered in 2022 were 80, and out of that count, 36 were delivered during the fourth quarter. The Valkyrie comes with a base price tag of $3 million.

The success of this endeavor can be attributed in part to the DBX. This SUV boasts a high profit margin and is produced in large quantities. It is priced competitively, falling between the cost of a top-tier Range Rover and a Bentley Bentayga.

Is it possible for Aston to make me wealthy?

Theoretically, should the company reach an EBITDA of £500m within the next few years, it's likely that the value of the shares will follow suit by going up. Nevertheless, the main problem is the debt. While the debt is decreasing, the obligation to repay it will still negatively affect the business's profitability for an extended period of time.

The prediction for 2023 shows that the burden of debt will be challenging, as it is expected that £120m will need to be spent on interest expenses.

However, over time, if the advice is consistent, I am sure that the debt will decrease and the company will achieve genuine and lasting profitability.

Is it possible to become wealthy through Aston shares? It's currently unclear what the share price will be like in five years, but I'm optimistic that it will rise. That's why I'm increasing my investment.

Ferrari currently holds a value of €48bn and sells about 11,000 cars annually. Aston Martin, on the other hand, has a significantly lower value which is about one quarter of Ferrari's value.