General Motors (GM) Outpaces Stock Market Gains: What You Should Know
General Motors (GM) closed at $36.14 in the latest trading session, marking a +1.35% move from the prior day. This change outpaced the S&P 500's 0.09% gain on the day. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.62%.
Coming into today, shares of the automaker had lost 4.6% in the past month. In that same time, the Auto-Tires-Trucks sector gained 0.54%, while the S&P 500 gained 2.08%.
GM will be looking to display strength as it nears its next earnings release. On that day, GM is projected to report earnings of $1.44 per share, which would represent a year-over-year decline of 20.44%. Meanwhile, our latest consensus estimate is calling for revenue of $35.81 billion, down 2.6% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.67 per share and revenue of $145.86 billion, which would represent changes of +1.99% and -0.81%, respectively, from the prior year.
Any recent changes to analyst estimates for GM should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GM is currently a Zacks Rank #3 (Hold).
Looking at its valuation, GM is holding a Forward P/E ratio of 5.35. This represents a discount compared to its industry's average Forward P/E of 10.89.
Investors should also note that GM has a PEG ratio of 0.6 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Automotive - Domestic stocks are, on average, holding a PEG ratio of 1.24 based on yesterday's closing prices.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 112, which puts it in the top 44% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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