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Tesla (TSLA) Shares Crash on Analyst Downgrade, Competitors Gain

Stocks in this article: HMC TSLA GM TM F

General Motors  (GM) gained 0.08% to $35.94 as of market close. The automaker moved lower earlier in the day, a hangover from worse-than-expected September sales released a day earlier, before paring losses.

General Motors experienced an 11% drop in September sales, despite estimates of a 4.2% decline.

TheStreet Ratings team rates General Motors as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate General Motors (GM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had subpar growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 3.9%. 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.
  • Compared to its closing price of one year ago, GM's share price has jumped by 57.97%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $4,893.00 million or 24.12% when compared to the same quarter last year. In addition, General Motors has also modestly surpassed the industry average cash flow growth rate of 18.02%.
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.

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