Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, GM's share price has jumped by 38.85%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- GM's revenue growth trails the industry average of 14.4%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
- Net operating cash flow has significantly increased by 66.07% to $3,383.00 million when compared to the same quarter last year. Despite an increase in cash flow of 66.07%, GENERAL MOTORS CO is still growing at a significantly lower rate than the industry average of 122.79%.
- GENERAL MOTORS CO's earnings per share declined by 13.6% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $4.62 versus $8.13 in the prior year. For the next year, the market is expecting a contraction of 30.3% in earnings ($3.22 versus $4.62).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Automobiles industry average. The net income has decreased by 13.0% when compared to the same quarter one year ago, dropping from $2,107.00 million to $1,833.00 million.
General Motors Company (GM) designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. General has a market cap of $38.92 billion and is part of the consumer goods sector and automotive industry. The company has a P/E ratio of 9.3, below the S&P 500 P/E ratio of 17.7. Shares are up 25.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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