GM Tops US Auto Sales in 2025 Despite Q4 Dip: Time to Buy the Stock?

Core Insights - General Motors (GM) was the top-selling automaker in the U.S. for 2025, with deliveries increasing by 5.5% to 2.85 million units, outperforming Toyota, which sold 2.52 million vehicles [1][2] - GM's market share rose by 0.5 percentage points to approximately 17%, and the company maintained its leadership in full-size pickups, selling 940,000 units, a 7% increase [2] - GM was the second-largest electric vehicle (EV) seller in the U.S. in 2025, with EV sales rising 48% to 169,887 units [2] Sales Performance - Total sales in Q4 2025 fell by 7% year over year to 703,001 vehicles, with EV deliveries dropping 43% to 25,219 units [3] - Despite the decline in Q4, GM anticipates resilient demand across various price points, supporting growth into 2026 [3] Growth Drivers - GM is adjusting its strategy to scale EV plans amid slower consumer adoption, while also focusing on robust internal combustion engine (ICE) volumes and production base strengthening [6] - Upcoming product launches, including the next-gen Cadillac CT5 and redesigned XT5, highlight GM's commitment to meet U.S. market demand [6] Software and Services - GM's software and services business is emerging as a significant growth driver, with revenues from Super Cruise, OnStar, and other products reaching approximately $2 billion in 2025 [7] - Deferred revenues increased by over 90% year over year to $5 billion, with OnStar's subscriber base growing by 34% to over 11 million [7][8] International Performance - GM's restructuring efforts in China have led to a 10% year-over-year increase in vehicle sales, with market share expanding to 6.8% [9] Financial Position - GM ended Q3 2025 with strong automotive liquidity of $35.7 billion and repurchased over $3.5 billion of stock, reducing its share count by 15% year over year [10] - The stock is trading at a forward earnings multiple of 7.13X, significantly lower than peers like Toyota and Tesla, indicating potential undervaluation [11] Earnings Outlook - The Zacks Consensus Estimate for GM's EPS in 2026 suggests a 13% increase from 2025 projected levels [13] - GM's strong balance sheet and ongoing buybacks contribute to a positive investment outlook, despite recent stock price increases [15]