After Fernando Alonso’s brilliant F1 podium, should I race to buy Aston Martin shares?

Fernando Alonso’s podium at the last Bahrain Formula One race has given it away Aston Martin (LSE: AML) is showing encouragement.

After being fastest in practice, Alonso overtook seven-time world champion Lewis Hamilton during the race.

Pundits even claim that Aston Martin can challenge the championship contenders Red Bull and Ferrari this season.

This recent success has boosted the brand’s stock price. It has almost doubled this year and experts predict the podium could add $400m to the company’s value. The stock price has jumped as much as 30% compared to before the race weekend.

If there is more to come, could it be a good season for Aston Martin and its shareholders?

Aston Martin – beyond Bond

This is an exciting new chapter for the Aston Martin brand that could win over a new generation of fans. Until now, the 110-year-old automaker has been synonymous with James Bondespecially its historical model.

But involvement in F1 brings bang up to date. More than 60% of new customers for the brand, partly through the race strategy. F1’s fan base totals 150 million people. Importantly, the test drive is up more than 60% in the main market.

Last year, Aston Martin’s profits rose by 26% and the average selling price exceeded £200,000. Many models are sold until 2023.

After about 6,400 in 2022, the target is 7,000 this year and 10,000 in the long term.

This all seems like a winning proposition, which is important to secure continued investment in model updates, marketing, and new launches.

The price of success

But winning costs money. So does keeping up with the pack in the fast-changing automotive market.

Revenue of £1.4bn in 2022 is eaten up by production costs, investment, overheads and interest. This left the business with a full-year loss of £527m, almost three times higher than in 2021.

Electrification will also be a challenge, as Aston Martin ushers petrol heads into a new high-performance portfolio as the world switches vehicle fuels.

The first plug-in hybrid, the Valhalla, starts deliveries in 2024 and the first electric model will arrive in 2025.

With many countries looking to ban the sale of new fossil-powered cars by 2035, the race will remain relevant and exciting.

Age and experience

There is also the unpredictable nature of F1. Leaders can be turned into laggards in some races, such as the speed of development during the season. Furthermore, the star driver Fernando Alonso is the oldest on the grid at 41. This exceeds the retirement age in such a demanding sport.

His vast experience was a key factor in the team’s success. He is a two-time world champion from racing with Renault. He also won the Le Mans 24-hour Race twice. He has hundreds of podiums, pole positions and fastest laps to his name.

Those are big shoes to fill for teammate Lance Stroll, the son of the F1 team owner, when he arrives.

Aston Martin is on an exciting and transformational journey. But as a long-term investor, and given the risk, I plan to be a spectator and invest elsewhere. I will still follow the F1 team. And if my portfolio delivers in the long run, I hope I can invest in one of these amazing road cars in the future.