Is GM Set for 14th Straight EPS Beat in Q4? How to Play the Stock Now

Core Insights - General Motors (GM) is expected to report its fourth-quarter 2025 results on January 27, with an EPS estimate of $2.19 and revenues of $45 billion, reflecting a 6% decline from the previous year [1][2] - The full-year 2025 revenue estimate is $185 billion, indicating a 1% year-over-year decline, while the EPS is projected at $10.31, a 2.7% contraction from the previous year [2] - GM has consistently surpassed earnings estimates for the past 13 quarters, with a positive Earnings ESP of +16.01% and a Zacks Rank of 1, indicating strong buy potential [3] Sales Performance - In Q4 2025, GM delivered 703,001 vehicles in the U.S., a 7% decline year-over-year, mirroring industry trends, with electric vehicle (EV) sales dropping 43% to 25,219 units [5][6] - Despite the decline in Q4, GM was the top-selling automaker in the U.S. for 2025, with full-year deliveries increasing by 5.5% to 2.85 million units [9] - In China, GM's Q4 deliveries were approximately 541,000 units, down from 600,000 units in Q4 2024, but full-year deliveries rose 2.3% to 1.9 million vehicles, driven by a 22% increase in new energy vehicle demand [10] Financial Outlook - The GM North America (GMNA) unit's revenue estimate for Q4 is around $37 billion, a 7% decrease year-over-year, while EBIT is expected to rise to $2.3 billion from $2.2 billion in Q4 2024 [8] - GM anticipates recording about $6 billion in special charges in Q4 2025 due to its EV rollback, which will impact net income but not adjusted earnings [11] - GM's stock has gained over 50% in the past six months, outperforming industry peers, and is currently trading at a forward earnings multiple of 6.77, indicating it may be undervalued [12][15] Strategic Adjustments - GM is adjusting its strategy by scaling back EV capacity to align with demand, focusing on higher-margin vehicles and proven revenue drivers [17] - The company is experiencing growth in its software and services business, with strong revenues from products like Super Cruise and OnStar [18] - GM's automotive liquidity stands at approximately $36 billion, with ongoing buybacks, enhancing its financial position [18]