Is General Motors Co. overvalued or undervalued?

As of 28 January 2025, the valuation grade for General Motors Co. has moved from very attractive to attractive, indicating a shift in perception regarding its value. The company is currently assessed as undervalued, with a P/E ratio of 8, which is significantly lower than the industry average, and an EV to EBITDA ratio of 4.72. Additionally, the Price to Book Value stands at 0.71, suggesting that the stock is trading below its book value, further supporting the undervaluation thesis.
In comparison to peers, General Motors Co. has a more favorable P/E ratio than Tesla, Inc., which is considered very expensive at 144.93, and is also lower than Ford Motor Co.'s P/E of 8.68. The company's return on equity (ROE) of 9.46% and return on capital employed (ROCE) of 7.46% indicate solid profitability metrics, reinforcing its attractiveness as an investment. Despite recent underperformance compared to the S&P 500, with a year-to-date return of -8.92% versus the index's 2.44%, the valuation metrics suggest that General Motors Co. presents a compelling opportunity for investors.