Key Takeaways
- General Motors fell 7% in two days from a 52-week high as New York filed its share of a $220 million driver data settlement.
- New York’s attorney general said GM’s OnStar app told more than 370,000 drivers they weren’t enrolled while GM collected and sold their data.
- GM earned $4.1 billion of adjusted EBIT on $50.0 billion of third-quarter revenue, while Ford earned $2.7 billion on $49.5 billion.
- GM’s Jan. 27 report brings its 2027 outlook and will show whether profit can keep growing against tariff and warranty costs.
General Motors (GM) closed Friday at $86, down 7% from Wednesday’s close at a 52-week high.
On Friday, New York filed its piece of a $220 million multistate settlement over GM’s sale of driver data. Thirty-five states and Washington, D.C., announced the deal on Oct. 29, so the cost was already public.
Ford (F) offers a better yardstick for what drives GM’s value. On nearly the same third-quarter revenue, GM earned about 50% more adjusted EBIT than its Dearborn rival.
The settlement does touch something GM cares about, though. It’s pitching OnStar and Super Cruise as growth engines, and both run on driver data.
What GM agreed to pay
The states allege GM sold Smart Driver data to Verisk and LexisNexis Risk Solutions, which built driver reports for insurers. GM ended the program in 2024 and settled without admitting liability.
Under the deal, GM must:
- Pay $220 million within 30 days after the Nov. 30 effective date.
- Get express consent before collecting or sharing driving and location data.
- Run a privacy program reviewed by an independent assessor.
New York Attorney General Letitia James said the OnStar app wrongly told more than 370,000 drivers they weren’t enrolled while GM collected and sold their data.
GM said the agreement “reinforces steps we’ve taken to strengthen our privacy practices.” Measured against its profits, the bill is small…
Third-quarter net income reached $3.3 billion on its own, about 15 times the settlement.
Detroit’s margin gap
The quarter showed why investors care more about trucks than fines. GM’s revenue rose 2.9% to $50.0 billion, EBIT-adjusted climbed 21.6% to $4.1 billion, and adjusted EPS of $3.70 beat estimates.
Ford’s revenue fell 2% to $49.5 billion, and its adjusted EBIT rose 3% to $2.7 billion. It raised the low end of its full-year outlook to $10.5 billion to $11 billion, against GM’s narrowed $14.5 billion to $15.5 billion.
Ford CEO Jim Farley said cost actions and software growth are moving Ford “toward an 8% adjusted EBIT margin by 2029.” GM’s North America business already ran at 8.7% last quarter:
That gap is GM’s real edge, and trucks and SUVs are doing most of the work.
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Buybacks at 6x earnings
GM trades at 6.2x forward earnings even after a 26% gain over the past year. Ford traded near 6x as well in late October, so the market isn’t paying GM extra for its stronger margins.
The Street’s $101 average target implies about 17% upside, and GM is acting on the discount. It finished January’s $6 billion buyback and authorized $20 billion more. How much has it already spent?
GM had 849 million shares outstanding on Sept. 30, down from 1.2 billion at the end of 2023.
The risks sit mostly outside the courtroom. CEO Mary Barra warned of “clear external headwinds” that in some cases are “intensifying.” Tariff costs are tracking toward the low end of a $2.5 billion to $3.5 billion range, while warranty costs sit at the high end of a $1 billion to $1.5 billion range.
Recalls keep coming too, including 67,380 vehicles this week, and Texas is pursuing its own driver data lawsuit.
My take: the settlement is a rounding error, and this week’s dip looks like a pause after a sharp run. At about 6x earnings, with better margins than Ford and $20 billion of buyback capacity, I’d buy on weakness. Data trust still matters, though, because connected services are part of GM’s case for a higher multiple.
GM moves to Nasdaq on Nov. 17, but the real test comes Jan. 27, when it reports fourth-quarter results and gives its 2027 outlook. Guidance for profit growth would support a higher multiple, while a flat outlook likely keeps the stock near 6x.
So what is General Motors stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
