Is General Motors (GM) Pricing In Its EV Push Or Still Focused On Legacy Autos

Simply Wall St

Sat, February 14, 2026 at 9:10 PM GMT+9 6 min read

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Wondering whether General Motors is priced for more than just its legacy auto business, or if the current share price already reflects the story you have in mind?

GM shares last closed at US$81.08, with recent returns of a 3.8% decline over 7 days, a 0.2% decline over 30 days, 0.1% year to date, 69.4% over 1 year, 93.8% over 3 years and 59.9% over 5 years.

Recent headlines around General Motors have focused on its continued position as a major US automaker, including its push into electric vehicles and ongoing investments in next generation technologies. At the same time, investors have also been weighing auto industry competition and how GM allocates capital between growth projects and shareholder returns.

On our checks, General Motors scores 4/6 for value, as shown in our valuation score. Next, we will walk through the key valuation methods behind that number and then finish with a way to assess value that puts all of those pieces into a single, clearer story.

General Motors delivered 69.4% returns over the last year. See how this stacks up to the rest of the Auto industry.

Approach 1: General Motors Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and discounting them back to today. It is essentially asking what all of General Motors future cash flows are worth in today’s dollars.

For General Motors, the latest twelve month free cash flow is about $16.3b. Analysts provide detailed forecasts for the next few years, and beyond that Simply Wall St extends those cash flow projections using a 2 Stage Free Cash Flow to Equity model. By 2026, projected free cash flow is $10.5b, and by 2035 the model is using an extrapolated figure of $12.7b, all still in $ terms.

When all of these projected cash flows are discounted back, the DCF model arrives at an estimated intrinsic value of about $120.03 per share. Compared with the recent share price of $81.08, this implies the stock is around 32.4% undervalued according to this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests General Motors is undervalued by 32.4%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

GM Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for General Motors.

Approach 2: General Motors Price vs Earnings

For profitable companies like General Motors, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It connects the share price directly to the business’s current earnings power, which is often the starting point for many investors.

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What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth prospects and risk. Higher expected growth or lower perceived risk can justify a higher multiple, while lower growth expectations or higher uncertainty tend to be associated with a lower multiple.

General Motors currently trades on a P/E of 23.05x, compared with the Auto industry average of 19.46x and a peer group average of 48.79x. Simply Wall St’s Fair Ratio for General Motors is 23.57x. This Fair Ratio is a proprietary estimate of what P/E might make sense given factors such as the company’s earnings growth profile, industry, profit margins, market cap and identified risks.

Compared with a simple peer or industry comparison, the Fair Ratio aims to be more tailored because it folds in those company specific characteristics rather than relying only on broad averages. With the actual P/E of 23.05x sitting close to the Fair Ratio of 23.57x, the multiple looks broadly in line with that model.

Result: ABOUT RIGHT

NYSE:GM P/E Ratio as at Feb 2026

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies.

Upgrade Your Decision Making: Choose your General Motors Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives on the Community page to connect your view of General Motors business story to a set of revenue, earnings and margin assumptions that roll into a Fair Value. You can then compare that Fair Value with the current price to decide if the stock looks attractive or expensive. You can also see those Narratives update automatically when new news or earnings arrive. For example, one investor might build a cautious GM Narrative with a Fair Value around US$41.79 based on modest growth and thinner margins, while another might build a more optimistic GM Narrative with a Fair Value around US$122.00 that leans on higher long term margins and cash flows. Both Narratives sit side by side so you can quickly see which story, and which number, you feel more aligned with.

For General Motors, we will make it really easy for you with previews of two leading General Motors Narratives:

First is a bullish take built around margin expansion, cash flow strength, and higher quality earnings over time.

Then there is a more cautious view where the current price sits close to what analysts see as fair value once tariff, EV, and spending risks are factored in.

🐂 General Motors Bull Case

Fair Value: US$122.00

Implied discount to this Fair Value vs the last close of US$81.08: about 33.5% undervalued

Revenue growth assumption used in this Narrative: 2.47% per year

Assumes GM successfully shifts more volume into higher margin North American trucks, SUVs, and crossovers, improving structural cash flow as supply moves away from more vulnerable imports.

Builds in rising profitability from Ultium based EVs, flexible plants, and proprietary battery chemistries, together with growing software and services revenue such as OnStar and Super Cruise.

Accepts risks from EV adoption, tariffs, competition, and quality issues, but still views GM as capable of reaching higher margins, stronger earnings, and a Fair Value of about US$122 using a discount rate of 12.33% and a future P/E of 8.40x.

🐻 General Motors Bear Case

Fair Value: US$79.46

Implied premium to this Fair Value vs the last close of US$81.08: about 2.0% overvalued

Revenue growth assumption used in this Narrative: 1.24% per year

Frames GM as broadly in line with consensus expectations, with modest revenue contraction near term and only a small lift in profit margins, supported by EV investments, software, and cost controls.

Highlights headwinds from tariffs, high capital and R&D spending, slower EV growth, warranty costs, and intense competition, which could limit how far earnings and margins can move.

Anchors on an analyst consensus Fair Value of about US$79.46, using a discount rate of 12.5% and a future P/E of 13.04x, suggesting the current share price is close to what this group sees as justified by their earnings and risk assumptions.

If you want to go deeper on either angle, the Community Narratives let you see all the assumptions behind these Fair Values in one place, then tweak them to fit your own view of GM.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for General Motors? Head over to our Community to see what others are saying!

NYSE:GM 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include GM.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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