To The Moon

$General Motors(GM)$ is scheduled to release its fourth-quarter and full-year 2025 financial results on Tuesday, January 27, 2026, before the market opens.

Coming off a strong 2025 where GM reclaimed its title as the top-selling automaker in the U.S., the Q4 report will be a balancing act between resilient internal combustion engine (ICE) profits and a significant "EV strategy reset."

Key Expectations & Estimates

Earnings Per Share (EPS): Analysts expect an adjusted EPS of approximately $2.19, a notable increase from $1.92 in Q4 2024.

Revenue: Consensuses are pegged at roughly $45 billion, which would represent a ~6% decline year-over-year.

Special Charges: GM will record roughly $6 billion in one-time charges related to its EV rollback and strategy pivot. This will significantly impact net income but should be excluded from the adjusted earnings that the market prioritizes.

General Motors (GM) reported its fiscal Q3 2025 results on October 21, 2025. The report was a classic "beat and raise" that saw the stock surge over 10% immediately after the announcement, driven by the company's ability to generate massive cash flow despite heavy structural transitions.

Q3 2025 Earnings Summary

GM delivered a significant beat on both the top and bottom lines, showcasing the strength of its traditional internal combustion engine (ICE) business to fund its future.

Adjusted EPS: $2.80 (crushing the consensus estimate of $2.32).

Revenue: $48.6 billion (exceeding the $45.3 billion forecast).

Net Income: $1.3 billion, which was lower year-over-year due to a $1.6 billion special charge related to the "EV strategy reset" (retooling plants and canceling supplier contracts).

North America EBIT Margin: 6.2%. While lower than their 8–10% target, it was highly resilient considering it absorbed $1.1 billion in tariff costs during the quarter.

China Turnaround: After several quarters of losses, the restructured China business returned to profitability in Q3, driven by a 10% increase in deliveries and strong New Energy Vehicle (NEV) momentum.

The Lesson Learnt: "Flexibility is the New Efficiency"

The primary lesson from the Q3 guidance and the subsequent management commentary was a shift from "EV-at-all-costs" to "Tactical Profitability."

1. ICE is "Higher for Longer"

The biggest takeaway was GM's admission that internal combustion engine (ICE) demand is more durable than previously forecasted. They announced a $1 billion investment into a new generation of V8 engines, a move that would have been unthinkable two years ago.

• Lesson: Management has learned that chasing EV volume targets at the expense of ICE profits is a losing strategy in a high-interest-rate environment.

2. Disciplined Overcapacity Management

GM took a massive $1.6 billion hit in Q3 to "rightsize" its EV footprint—specifically transitioning the Orion Assembly plant back toward ICE production.

• Lesson: The market rewarded the "pain now for gain later" approach. Investors preferred the one-time charge to clear the books of underutilized EV capacity rather than seeing margins bleed out over the next three years.

3. The "Incentive Trap" Avoidance

Despite a cooling auto market, GM kept incentives at only 4% of average transaction prices (ATP), while the industry average ballooned to nearly 7%.

• Lesson: By keeping inventory lean (down 16% YoY), GM proved they could maintain pricing power even when competitors were forced to discount. This "pricing over volume" mantra is now the cornerstone of their 2026 outlook.

4. Software as a Silent Driver

GM recognized nearly $2 billion in YTD revenue from software and services (Super Cruise, OnStar).

• Lesson: While EVs grab the headlines, high-margin (70%+) recurring software revenue is becoming the "safety net" that allows GM to maintain a high EPS even if vehicle sales volumes fluctuate.

Key Metrics to Watch

Investors should focus on these indicators to gauge GM's momentum heading into 2026:

North American EBIT Margins: GM’s North American segment (GMNA) is the company's engine. Analysts are looking for a segment EBIT of around $2.3 billion. Watch for management's commentary on maintaining the 8%–10% margin target, especially as they shift production back toward higher-margin trucks and SUVs.

The "EV Reset" Progress: While 2025 was a record year for GM's EV volume overall, Q4 saw a 43% drop in EV sales (25,219 units) as tax credit pull-forwards exhausted demand in Q3. Investors will want to see if the scale-back in EV capacity is successfully protecting the bottom line and how the software/services revenue (Super Cruise, OnStar) is offsetting these shifts.

China Profitability & Recovery: After a difficult few years in China, GM's restructured business there was profitable in Q3. A second consecutive profitable quarter in China would signal that the "rightsizing" of dealer networks and the push into New Energy Vehicles (NEVs) is finally yielding a sustainable turnaround.

General Motors (GM) Price Target

Based on 25 analysts from Tiger Brokers app offering 12 month price targets for General Motors in the last 3 months. The average price target is $82.65 with a high forecast of $110.00 and a low forecast of $48.00. The average price target represents a 3.73% change from the last price of $79.68.

Short-Term Trading Opportunities

GM has beaten earnings estimates in 13 consecutive quarters. This "beat-and-raise" habit makes it a popular target for post-earnings momentum trades.

The Bull Case (Upside Potential): If GM beats the $2.19 EPS target and provides 2026 guidance that exceeds the current consensus of $11.65 EPS, the stock could break past its recent 52-week highs ($85+). The stock currently trades at a forward P/E of roughly 6.7x, which remains "dirt cheap" compared to historical and industry averages.

The Bear Case (Downside Risk): Despite the strong fundamentals, the stock has rallied over 50% in the last six months. Much of the good news may already be "priced in." A cautious 2026 outlook regarding consumer demand or further regulatory/recall costs (like the recent NHTSA engine probe) could trigger "sell-the-news" profit-taking.

Capital Returns: Keep an eye on the remaining $2.8 billion buyback authorization. Any announcement of an increase to this program or the quarterly dividend (currently $0.15) often acts as a floor for the stock price during volatility.

Technical Analysis - Exponential Moving Average (EMA)

GM is showing signs of falling below its short-term period, and the bulls are still making an effort to push for an upside continuation, so we could be expecting investor to take interest in this stock given that it has a low forward P/E of roughly 6.7x,, this would make the current stock price undervalued.

And GM has beaten estimate for 13 consecutive times, but this time, investors might be waiting for an aggressive bullish 2026 roadmap, failing which, we could see a “sell the news” volatility happening for GM.

I will be looking at the price action on Monday (26 Jan) to see if there is an opportunity to load up with the current attractive stock price.

Summary

General Motors (GM) is scheduled to report its Q4 and full-year 2025 results on Tuesday, January 27, 2026. Following a year of strategic "resets," this report is expected to cement GM's position as a resilient leader in the transition from internal combustion to electric.

Financial Expectations

• Earnings per Share (EPS): Analysts expect an adjusted EPS of $2.21, a ~15% increase over Q4 2024.

• Revenue: Consensuses are pegged at $45 billion, representing a roughly 6% decline year-over-year.

• Special Charges: GM will record a $6 billion one-time charge due to its EV rollback and manufacturing strategy pivot. This will significantly impact GAAP net income but is generally excluded from the "adjusted" figures investors track.

Key Metrics to Watch

1. North American EBIT Margins: Look for a segment EBIT of approximately $2.3 billion. Management's ability to stay within their 8%–10% margin target is critical.

2. EV Strategy Progress: While Q4 EV sales fell 43% following the expiration of federal tax credits, total 2025 EV sales hit a record ~170,000 units. Investors want to see if the "scale-back" in EV capacity is successfully protecting the bottom line.

3. 2026 Guidance: The "real" catalyst will be the 2026 outlook. Analysts currently forecast a rebound to $11.65–$12.00 EPS for 2026, driven by fewer warranty costs and software revenue growth.

Short-Term Trading Outlook

GM enters the report with a 13-quarter streak of beating EPS estimates. With a low forward P/E of roughly 6.7x, it remains significantly undervalued compared to the broader market. However, with the stock up over 50% in the last six months, a "sell the news" reaction is possible unless management provides an aggressively bullish 2026 roadmap or increases the current $2.8 billion buyback authorization.

Appreciate if you could share your thoughts in the comment section whether you think GM would be able to continue beating the EPS estimates and provide a much bullish 2026 roadmap.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.