Ford Rises 23% in 6 Months: Should You Buy, Sell or Hold the Stock?

Ford Motor Company F shares have gained 23.4% over the past six months compared to the Zacks Automotive – Domestic industry’s growth of 38.4%. 

In the past six months, Ford has outperformed electric vehicle startup, Lucid Group, Inc. LCID, but underperformed its closest peer, General Motors Company GM. Lucid has lost 2%, while General Motors has gained 24.6%. 

Ford is benefiting from improved sales volumes. In the first eight months of 2025, Ford sales reached 1.49 million units, up 6.6% year over year, underpinned by a 14% year-over-year increase in sales of electrified vehicles.

Past 6 Months Price Performance

Factors Stimulating F’s Performance

Ford’s vehicle lineup, supported by F-series trucks, Maverick pickup and SUV models, including Escape, Explorer, Expedition, EcoSport and Edge, is impressive. The automaker’s hybrid strategy is also noteworthy. While the Model-e segment faces near-term headwinds, it is strategically positioned for robust long-term growth through a multifaceted approach. 

Ford Model e’s revenues more than doubled to $2.4 billion in the second quarter. Margins improved by nearly 44 points, largely due to product mix, supported by the full-year launch effect of the European Explorer and pre-models of the newly introduced Puma. From a capital allocation standpoint, Model e continues to make targeted investments in areas of breakthrough innovation, such as next-generation EVs and in areas of competitive advantage, including LFP battery technology, which is set to launch at the company’s new plant in Marshall, MI.

In the second quarter, Ford Pro, the commercial fleet solutions provider unit of Ford, stood out as the company’s primary growth engine. Over the past year, the segment has transformed by diversifying revenue streams. Its aftermarket parts, software and services contributed to 17% of Ford Pro’s EBIT, closer to its 20% target set for next year. These high-margin recurring revenues have made Ford Pro less cyclical and more resilient. 

Ford Pro’s growing share of vehicle volumes in the United States and Europe and expanding service operations network support rapid growth in high-margin software and physical services. Ford expects demand to remain strong in the second half of the year, supported by policy changes, which are likely to spark a recovery in small business activity.

Tariffs & Rising Number of Recalls Raise Concern

Ford has flagged an increase in its expected tariff impact for the year. In the second quarter alone, Ford incurred $800 million in tariff-related costs. It now expects a net $2 billion tariff hit for full-year 2025, up from the $1.5 billion projected previously. Initially, Ford had guided a $2.5 billion gross tariff impact, with plans to offset $1 billion through mitigation efforts. Now, it has raised its gross tariff cost forecast to $3 billion but still expects to offset $1 billion.

This week, Ford issued a recall for more than 1.45 million vehicles, including popular SUVs, trucks and vans, due to faulty rearview cameras. The latest recall follows a string of other recalls. Last month, the company recalled 355,000 trucks for instrument panel issues, followed by nearly 500,000 SUVs over defective brake hoses. Put together, Ford has issued more than 100 recalls so far in 2025. The rising number of recalls increases the warranty and recall expenses, which are likely to put pressure on the company’s margins.  

Ford’s Valuation & Estimates

From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.29, lower than the industry’s 2.66. 

 
The Zacks Consensus Estimate for F’s 2025 and 2026 EPS has moved up a penny and 5 cents, respectively, in the past 30 days.

Should You Buy the Stock Now?

While strategic investment in Ford Model e and diverse revenue streams of Ford Pro buoy the prospect of the automaker, the company is apparently not immune to ongoing tariff-related headwinds. Moreover, the rising number of recalls would not only put pressure on the company’s margins but it might also damage the company’s reputation.

The firm's long-term debt-to-capital ratio stands at 0.69, higher than the industry's 0.40. Elevated leverage restricts the firm’s financial flexibility to tap into growth opportunities. 

Taking these factors into account, prospective investors might delay purchasing the stock, whereas existing shareholders may opt to maintain their holdings.

F carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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