General Motors Reports Strong Q3 Performance, Highlights Expectations for Tesla
General Motors GM showcased impressive Q3 results this morning, demonstrating notable growth and increasing its profit outlook for the year.
Following the positive earnings report, GM shares surged +9% in today’s trading session, while Tesla TSLA saw a slight decrease of -0.3% as it prepares to release its own Q3 results after the market closes on Wednesday, October 23.
General Motors Q3 Results
Driven by its North American business, General Motors reported Q3 sales of $48.75 billion, reflecting a 10% increase from $44.13 billion in the same quarter last year. This result exceeded analyst expectations of $43.98 billion by 11%. Earnings per share (EPS) soared by 30% to $2.96, up from $2.28 a year earlier, outpacing forecasts of $2.49 per share by 19%.
Additionally, General Motors has beaten the Zacks EPS Consensus for nine consecutive quarters, boasting an average earnings surprise of 17.54% over its last four quarterly reports.
Image Source: Zacks Investment Research
Furthermore, General Motors has revised its full-year adjusted EPS forecast to a range of $10.00-$10.50, which exceeds the current Zacks Consensus estimate of $9.92 per share, reflecting a 29% growth projection.
Image Source: Zacks Investment Research
Tesla Expects Mixed Q3 Results
As for Tesla, analysts are anticipating a 9% increase in Q3 sales, projecting earnings of $25.57 billion. However, Tesla’s EPS is forecasted to decrease by 12% to $0.58, compared to last year’s $0.66 per share.
The company has faced challenges from price-cutting measures due to heightened competition in the electric vehicle market from companies like General Motors and Ford F. Projections suggest Tesla’s annual EPS will fall to $2.25 this year, down from $3.12, but may recover to $3.02 by FY25.
Image Source: Zacks Investment Research
Tesla has missed earnings expectations in its last four quarters, averaging a -7.99% EPS surprise. However, the Zacks ESP (Expected Surprise Prediction) indicates that Tesla is likely to meet Q3 expectations, with the Most Accurate Estimate for Q3 EPS also at $0.58.
Image Source: Zacks Investment Research
Performance Comparison Between GM and Tesla
So far this year, GM shares have surged nearly +50%, significantly outperforming both the broader market indexes and Tesla, which has declined by -13%.
Image Source: Zacks Investment Research
Despite this strong performance, GM’s stock trades at just 4.9 times forward earnings, substantially lower than Tesla’s 97.3 times forward earnings. While Tesla’s stock is expensive, it remains below its decade-long average of 119.2 times forward earnings.
Tesla’s price-to-sales (P/S) ratio stands at 7 times, closer to its 10-year median of 5.2 and significantly below its peak of 23.8. In contrast, General Motors boasts a low P/S ratio of 0.3, well under the optimal level of 2.
Image Source: Zacks Investment Research
Final Thoughts
Given General Motors’ current valuation and solid earnings report, the recent rise in GM shares seems sustainable. Additionally, if Tesla can deliver strong Q3 results, it may improve investor confidence in the stock.
Infrastructure Stock Boom to Sweep America
A significant initiative to overhaul the U.S. infrastructure is on the horizon. This bipartisan effort is urgent and expected to cost trillions. Many will benefit financially.
The key question is whether you will invest in the right stocks early enough to maximize their growth potential.
Zacks has created a Special Report to assist in this endeavor, and it is available for free. Discover five companies poised to succeed in construction and repair in areas such as roads and energy transformation.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
General Motors Company (GM) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Ford Motor Company (F) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
