Why Goodyear Tire & Rubber Stock Crashed Today

Core Insights - Goodyear Tire & Rubber Company reported Q4 2025 earnings that beat sales expectations but missed on earnings per share, leading to a 15% drop in stock price [1] Financial Performance - Q4 2025 sales were $4.9 billion, slightly above the forecast of $4.8 billion, but earnings per share were only $0.39, below the expected $0.49 [1][5] - Sales were flat compared to 2024 but showed a 4% organic growth after accounting for the disposal of its Off-the-Road tire and Chemical businesses [5] - For the full year 2025, Goodyear's sales declined 2% to $10.8 billion, and operating profit margins fell by 170 basis points to 6.8% [6] - The company reported a significant loss of $5.99 per share in 2025, compared to a profit of $0.16 per share in 2024 [6] Debt and Valuation - Goodyear generated $170 million in positive free cash flow for the year, but it carries approximately $6.5 billion in net debt, which is more than twice its market capitalization of $3 billion [7] - The enterprise value-to-free cash flow ratio stands at 55x, indicating that Goodyear stock may be overvalued and is viewed as a sell [7]