General Motors’ latest quarter was met with a strong positive reaction from the market, despite missing Wall Street’s revenue expectations. Management attributed performance to disciplined inventory management, strong pricing on internal combustion engine vehicles, and strategic shifts in response to changing consumer demand. CEO Mary Barra emphasized, “We proactively managed our net tariff exposure and were quick to respond to slowing EV demand by selling our share in the Altium Cells Lansing plant and pivoting Orion Assembly from EV to ICE production.” The company also highlighted margin expansion, driven by operational efficiencies and lower warranty expenses.
Is now the time to buy GM? Find out in our full research report (it’s free for active Edge members).
General Motors (GM) Q4 CY2025 Highlights:
- Revenue: $45.29 billion vs analyst estimates of $45.81 billion (5.1% year-on-year decline, 1.1% miss)
- Adjusted EPS: $2.51 vs analyst estimates of $2.26 (11.1% beat)
- Adjusted EBITDA: $6.06 billion vs analyst estimates of $5.08 billion (13.4% margin, 19.3% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $12 at the midpoint, beating analyst estimates by 1.5%
- Operating Margin: -8.1%, down from 3.2% in the same quarter last year
- Sales Volumes fell 9.8% year on year (10.2% in the same quarter last year)
- Market Capitalization: $76.18 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From General Motors’s Q4 Earnings Call
- Dan Levy (Barclays) asked about the sustainability of pricing in a demand-constrained environment. CFO Paul Jacobson replied that pricing assumptions are flat, reflecting the annualization of previous increases rather than expectations for further hikes.
- Michael Ward (Citigroup) inquired about inventory discipline and its impact on cash flow. Jacobson emphasized that maintaining targeted inventory ranges supports consistent cash generation, with no plans for significant inventory builds.
- Joe Spak (UBS) pressed for details on hybrid strategy and capital allocation. CEO Mary Barra explained that hybrid investments are included in planned capital expenditures, with a segment-by-segment approach to meeting demand.
- Andrew Percoco (Morgan Stanley) sought clarification on tariff mitigation strategies and Super Cruise expansion. Jacobson detailed annualization benefits from previous cost offsets, and Barra confirmed ongoing regulatory work for international Super Cruise rollout.
- James Picariello (BNP Paribas) asked about achieving North America margin targets and memory chip supply risks. Jacobson attributed margin gains to improved EV profitability and cost controls, and Barra noted the team’s proactive management of chip supply challenges.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of EV cost reductions and progress toward North America margin targets, (2) the expansion and monetization of digital services like Super Cruise and OnStar, and (3) successful execution of new vehicle launches and manufacturing onshoring. Trends in commodity prices, regulatory shifts, and international market performance will also be key factors shaping General Motors’ trajectory.
General Motors currently trades at $84.22, up from $79.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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