General Motors (NYSE:GM) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

General Motors Company (NYSE:GM) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of $1.33/share on revenue of $35.156 billion. The consensus earnings per share (EPS) of $1.33/share is based on a poll of 15 analysts and represents a decline in eps of −22.9% over the same quarter last year, when the company reported earnings of $1.72/share.

The revenue forecast of $35.156 billion based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −0.9%. Last year the company reported $35.473 billion in revenue for the quarter.

Expected to report EPS contraction of −22.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $35,155.84 $35,473.00 −0.9%
EPS $1.33 $1.72 −22.9%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from General Motors Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$1.78 -$0.50 −71.9% Beat
Q1, 2020 $0.34 $0.62 84.3% Beat
Q4, 2019 $0.01 $0.05 662.2% Beat
Q3, 2019 $1.37 $1.72 25.8% Beat
Q2, 2019 $1.45 $1.64 12.8% Beat
Q1, 2019 $1.12 $1.41 26.2% Beat
Q4, 2018 $1.21 $1.43 18.6% Beat
Q3, 2018 $1.25 $1.87 49.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −4.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $26.33 $25.20 −4.3% Decline
May 6, 2020 $21.26 $22.44 5.6% Increase
February 5, 2020 $34.37 $34.33 −0.1% Decline
October 29, 2019 $36.64 $37.91 3.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

General Motors Company is currently trading at $34.24/share, down −1.9% for the day. The company is trading at approximately 87.9% of its 52-week high of $38.95/share. The company’s stock price is up 35.9% since the last earnings report and down −4.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 59.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:GM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 32.15 and a forward P/E multiple of 12.71.

General Motors Company’s current share price also implies a price-to-book (P/B) multiple of 1.24. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $34.24
P/E Ratio 32.1x
P/E Ratio (Fwd) 12.7x
PEG Ratio −0.4
Total Debt / Total Capital 70.3%
Levered Free Cash Flow -$11.949 billion
EV / EBITDA 17.4x

Finbox

General Motors Company is a large-cap stock with a market capitalization of $49.931 billion and a total enterprise value of $151.4 billion. The company operates in the Consumer Discretionary sector and the Automobiles industry.

General Motors Company designs, builds, and sells cars, trucks, crossovers, and automobile parts worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, and Wuling brand names. The company also sells trucks, crossovers, and cars to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, it offers safety and security services for retail and fleet customers, including automatic crash response, emergency services, crisis assist, stolen vehicle assistance, roadside assistance, and turn-by-turn navigation, as well as connected services comprising mobile applications for owners to remotely control their vehicles and electric vehicle owners to locate charging stations, on-demand vehicle diagnostics, smart driver, marketplace in-vehicle commerce, connected navigation, SiriusXM with 360L, and 4G LTE wireless connectivity. Further, the company provides automotive financing services; and operates an online new vehicle store. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.