Why General Motors Stock Remains Undervalued Despite Reaching 52-Week Peak

General Motors continues to trade near its one-year summit, closing the recent session at $81.76—merely 1.5% shy of the peak. Yet what makes this milestone noteworthy isn’t just the price movement; it’s the fundamental strength underlying the climb. Over six months, GM shares have surged 70%, decisively outpacing both Ford (up 30%) and Tesla (up 52%), signaling investor confidence in the legacy automaker’s transformation strategy.

Valuation Disconnect: The Real Story

Despite this impressive run, GM stock trades at just 7X forward earnings—a stark contrast to Ford’s 9.73X and Tesla’s astronomical 265.57X multiple. This valuation gap represents a significant opportunity. The company carries an A-grade Value Score, suggesting the market hasn’t fully priced in the strength of its operational turnaround and growth initiatives.

Earnings momentum reinforces this thesis. GM has beaten EPS estimates for 13 consecutive quarters, with 2026 consensus projections pointing to 13% growth over 2025 levels. The consensus mark for earnings has moved upward consistently over the past 60 days, reflecting growing confidence in the company’s execution.

Dominance in the U.S. Market & EV Leadership

General Motors holds the top-selling automaker position in the United States with 17% market share in Q3 2025—a 50 basis-point year-over-year increase. Strong demand for Chevrolet, Buick, GMC, and Cadillac continues to drive expansion, fueled by popular pickup trucks and SUV offerings that resonate with American consumers.

The company’s emergence as a serious EV competitor deserves particular attention. Solidifying its position as the second-largest EV seller, GM delivered 144,668 electric vehicles in the first nine months of 2025—a stunning 105% year-over-year increase. This trajectory positions GM as more than just a traditional automaker; it’s becoming an electric vehicle powerhouse. The company remains focused on maintaining robust internal combustion engine volumes while simultaneously scaling EV production through onshoring initiatives. Upcoming launches—including the next-generation Cadillac CT5, redesigned XT5, and the Orion Assembly plant’s 2027 relaunch to produce the Cadillac Escalade and new full-size pickups—underscore management’s commitment to meeting diverse customer preferences.

China: From Drag to Growth Driver

General Motors’ China restructuring has shifted from concerning to compelling. Through operational rightsizing, dealer network streamlining, cost reduction, and new product introductions, the company has engineered a turnaround. Q3 vehicle sales in China climbed 10% year-over-year, marking the second consecutive quarterly gain. Market share expanded 30 basis points to 6.8%, while equity income reached $80 million—the fourth straight quarterly improvement.

Full-year China profitability now appears achievable, a dramatic shift from recent quarters and a testament to the restructuring’s effectiveness.

Software & Services: The Hidden Growth Engine

Perhaps most intriguingly, GM’s software and services segment is emerging as a significant revenue contributor and long-term value creator. The company has already generated approximately $2 billion in revenues this year from Super Cruise, OnStar, and related software offerings. Deferred revenues reached $5 billion by Q3 2025—a 90% year-over-year jump that signals substantial future revenue visibility.

OnStar’s global subscriber base expanded 34% to exceed 11 million, with expectations to cross 12 million before year-end. Super Cruise adoption is accelerating, boasting over 500,000 active users, and the company projects Super Cruise revenues will surpass $200 million in 2025 alone.

Capital Allocation: The Investor’s Friend

GM exited Q3 2025 with $35.7 billion in automotive liquidity, including $21.8 billion in cash and marketable securities—demonstrating substantial financial flexibility. The company’s capital return strategy reinforces investor confidence.

Share buybacks totaled more than $3.5 billion through the first three quarters of 2025, with $1.5 billion executed in Q3 alone, reducing share count to 954 million—a 15% year-over-year decline. Additionally, GM raised its dividend by 25% in 2025, signaling management’s conviction in sustainable earnings power. The company maintains $2.8 billion in remaining buyback authorization, providing continued flexibility for shareholder returns.

The Investment Case

General Motors presents a rare combination: a company executing successfully across multiple dimensions while trading at a meaningful valuation discount. Strong earnings momentum, expanding domestic market share, accelerating EV adoption, improving China profitability, and rising software revenues create a compelling growth narrative. Add solid liquidity, aggressive capital returns, and reasonable valuation, and GM appears positioned to deliver sustained returns for patient investors.

The stock currently holds a Zacks Rank #1 (Strong Buy) designation, reflecting analyst conviction in the company’s growth trajectory and valuation appeal.