NEW YORK (TheStreet) -- General Motors (GM) shares are down 0.2% to $32.25 in early market trading on Tuesday as the October European sales figures showed GM sales fell 5.1% from the same period last year to 69,421 vehicles sold during October, leading to a fall in market share to 6.5% from 7.3%.
General Motors shares are falling due to GM being the only major car company to record a net sales decrease in the region during the month, according to numbers compiled by the European Automobile Manufacturers' Association.
Conversely, there was a 6.2% rise in sales across the industry, which puts that market on course for the first overall annual gain in sales in seven years. Ford (F) reported a 4.2% rise in sales to 76,312, though its market share also decreased to 7.1% from 7.3% during the month.
TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a number of 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, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GM's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GENERAL MOTORS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $2.35 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $2.35).
- GM's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, GENERAL MOTORS CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The gross profit margin for GENERAL MOTORS CO is rather low; currently it is at 16.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.74% trails that of the industry average.
- You can view the full analysis from the report here: GM Ratings Report