Have you been paying attention to shares of General Motors (GM)? Shares have been on the move with the stock up 12.5% over the past month. The stock hit a new 52-week high of $81.22 in the previous session. General Motors has gained 51.8% since the start of the year compared to the 12.7% gain for the Zacks Auto-Tires-Trucks sector and the 14.8% return for the Zacks Automotive - Domestic industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 21, 2025, General Motors reported EPS of $2.8 versus consensus estimate of $2.28 while it beat the consensus revenue estimate by 9.76%.
For the current fiscal year, General Motors is expected to post earnings of $10.3 per share on $184.46 in revenues. This represents a -2.83% change in EPS on a -1.6% change in revenues. For the next fiscal year, the company is expected to earn $11.59 per share on $183.87 in revenues. This represents a year-over-year change of 12.49% and -0.32%, respectively.
Valuation Metrics
Though General Motors has recently hit a 52-week high, what is next for General Motors? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
General Motors has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 7.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 16.7X. On a trailing cash flow basis, the stock currently trades at 3.5X versus its peer group's average of 8.5X. Additionally, the stock has a PEG ratio of 0.92. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making General Motors an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, General Motors currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if General Motors meets the list of requirements. Thus, it seems as though General Motors shares could have a bit more room to run in the near term.
How Does GM Stack Up to the Competition?
Shares of GM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Federal Signal Corporation (FSS). FSS has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Federal Signal Corporation beat our consensus estimate by 6.54%, and for the current fiscal year, FSS is expected to post earnings of $4.63 per share on revenue of $2.16 billion.
Shares of Federal Signal Corporation have gained 1.9% over the past month, and currently trade at a forward P/E of 26.92X and a P/CF of 25.38X.
The Automotive - Domestic industry is in the top 28% of all the industries we have in our universe, so it looks like there are some nice tailwinds for GM and FSS, even beyond their own solid fundamental situation.
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General Motors Company (GM): Free Stock Analysis Report Federal Signal Corporation (FSS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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