After a Hot July for GM EV Sales, Is the Stock a Buy Now?

Core Insights - General Motors (GM) achieved a significant increase in electric vehicle (EV) sales, selling over 19,000 units in July, representing a 115% year-over-year growth, primarily driven by the Chevrolet Equinox EV model [1][10] - GM maintained its position as the second-largest EV seller in the U.S. in 2025, following Tesla, with its EV sales more than doubling in the last reported quarter [2] - The company reported record revenues of $91 billion for the first half of 2025, despite facing $1.1 billion in net tariffs [4][5] Sales Performance - GM's EV sales growth is notable, with a strong demand for the Chevrolet Equinox EV contributing significantly to the overall sales increase [1][10] - The company’s U.S. market share rose to 17.3%, an increase of 1.2 percentage points from the previous year, indicating a positive trend in market presence [6] Financial Performance - GM's second-quarter earnings per share (EPS) of $2.53 exceeded expectations by 6%, marking the 12th consecutive quarter of earnings beats [4][5] - The company expects net tariff costs to rise in the third quarter, with a gross tariff impact projected between $4 billion and $5 billion for the full year [5] Strategic Initiatives - GM is investing heavily in battery, software, and autonomous vehicle innovation, while also expanding its U.S. manufacturing footprint and domestic supply chain [6] - The company completed a $2 billion accelerated share repurchase program, retiring 10 million shares, which reflects its commitment to returning value to shareholders [8] Market Position and Valuation - GM's stock has risen 16% over the past three months, outperforming both Ford and Tesla [9] - The stock trades at a forward price-to-sales (P/S) ratio of 0.29, significantly lower than the industry average of 2.64, indicating potential undervaluation [12] Challenges Ahead - GM faces challenges such as rising warranty costs and increased competition, which may pressure fleet pricing in the second half of the year [14] - The company anticipates a decline in EPS and sales for 2025, with a projected year-over-year decline of 11% and 4.3%, respectively [15]