Rating Change #4
General Motors Co (GM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and poor profit margins.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 48.4% when compared to the same quarter one year ago, falling from $1,406.00 million to $725.00 million.
- The gross profit margin for GENERAL MOTORS CO is currently extremely low, coming in at 14.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.90% trails that of the industry average.
General Motors Company (GM) operates as a global automaker. It produces cars and trucks and sells them under the brand names Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Opel, Isuzu, Vauxhall, Jiefang, FAW, and Wuling. The company has a P/E ratio of 37.8, above the average automotive industry P/E ratio of 4.9 and above the S&P 500 P/E ratio of 17.7. General has a market cap of $38.79 billion and is part of the consumer goods sector and automotive industry. Shares are up 30.5% year to date as of the close of trading on Tuesday.You can view the full General Ratings Report or get investment ideas from our investment research center.
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