1 Auto Stock to Buy Now and 1 to Sell Before It Becomes Worthless

NYSE: GM | General Motors Co. News, Ratings, and Charts

GM – Amid lingering macro headwinds, auto sales dropped month-over-month in November 2022. However, it increased by more than 10% year-over-year. Given the solid long-term prospects of the industry, quality auto stock General Motors (GM) could be an ideal addition to your portfolio. However, fundamentally weak stock Nikola (NKLA) might be best sold off now. Keep reading….

Macroeconomic headwinds and supply chain disruptions have marred the performance of the auto sector. Also, rising mortgage rates and soaring inflation have put additional pressure on the industry. In November 2022, new vehicle sales in the United States fell 4% month-over-month. However, despite widespread uncertainties, sales increased 11.3% year-over-year.

The automotive industry’s long-term prospects look bright amid the increasing adoption of advanced technologies and the growing demand for electric vehicles (EVs). According to Beyond Market Insights, the size of the global EV market is projected to grow at a CAGR of 22.5% between 2022 and 2030.

Given the backdrop, quality auto stock General Motors Company (GM) could be an ideal addition to your portfolio. However, shares of fundamentally weak Nikola Corporation (NKLA) might be best avoided now.

Stock to Buy:

General Motors Company (GM)

General Motors Company designs, builds and sells trucks, crossovers, cars, and automobile parts and accessories worldwide. The company operates through GM North America; GM International; Cruise; and GM Financial segments.

On November 17, 2022, GM and Vale Canada Limited, a subsidiary of Vale S.A. (VALE), signed an agreement for the long-term supply of battery-grade nickel sulfate to enhance North American EV supply chains. This deal is expected to help GM reach its target of building 1 million EVs annually in North America in 2025.

In terms of forward Price/Sales, GM is currently trading at 0.35x, 58.2% lower than the industry average of 0.84x. Its forward EV/EBIT multiple of 10.64 is 13.8% lower than the industry average of 12.34.

GM’s trailing-12-month Capex/Sales of 10.94% is 253.8% higher than the 3.09% industry average. Its trailing-12-month EBITDA margin of 12.24% is 10.71% higher than the 11.05% industry average.

GM’s total net sales came in at $41.88 billion for the third quarter that ended September 30, 2022, up 56.4% year-over-year. Its adjusted EBIT increased 46.7% year-over-year to $4.28 billion. In addition, its EPS increased 48℅ year-over-year to $2.25.

GM’s revenue is expected to increase by 21.4% year-over-year to $154.24 billion in 2022. Its EPS is expected to grow marginally year-over-year to $7.19 in 2022. It surpassed EPS estimates in three of four trailing quarters. Over the past six months, the stock has gained 4.5% to close the last trading session at $38.28.

GM’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall B rating indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

GM has an A grade for Growth and a B for Value and Sentiment. In the Auto & Vehicle Manufacturers industry, it is ranked #18 out of 62 stocks. Click here for the additional POWR Ratings for Quality, Momentum, and Stability for GM.

Stock to Avoid:

Nikola Corporation (NKLA)

NKLA is a technological inventor and integrator to create energy and transportation solutions. It works through two market segments: Truck and Energy.

In terms of forward Price/Sales, NKLA is currently trading at 14.77x, 1063.36% higher than the industry average of 1.27x. Its forward EV/Sales multiple of 14.54 is 790.47% higher than the industry average of 1.63.

NKLA’s trailing-12-month gross profit margin of negative 133.29% is lower than the 29.09% industry average. Its trailing-12-month ROCE of negative 113.47% compares with the 14.19% industry average.

NKLA’s cash and cash equivalents came in at $315.73 million for the period ended September 30, 2022, compared to $497.24 million for the period ended December 31, 2021. Its total current assets came in at $486.92 million, compared to $524.73 million for the same period. Also, its long-term debt came in at $283.26 million, compared to $25.05 million.

Street expects NKLA’s EPS to decrease 44.3% year-over-year to negative $1.14 in 2022. Over the past year, the stock has lost 76.7% to close the last trading session at $2.32.

NKLA’s overall F rating equates to a Strong Sell in our POWR Ratings system. It has an F grade for Stability and Quality and a D grade for Value and Growth. It is ranked #61 in the same industry.

Beyond what is stated above, we’ve also rated NKLA for Momentum and Sentiment. Get all NKLA ratings here.


GM shares were trading at $38.27 per share on Monday afternoon, down $0.01 (-0.03%). Year-to-date, GM has declined -34.43%, versus a -15.76% rise in the benchmark S&P 500 index during the same period.


About the Author: Rashmi Kumari


Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GMGet RatingGet RatingGet Rating
NKLAGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Investor Alert: Healthy Pause for Stock Market

This recent pullback very much looks like a “healthy pause” for the stock market as the S&P 500 (SPY) comes off recent highs. What is the cause of the pause? How long will it last? What happens afterwards? And how to make money in this market? Steve Reitmeister will answer all these questions and more in his latest market commentary below...

3 Biotech Stocks to Buy to Power Through April

The biotech sector is primed for growth, fueled by a surge in FDA approvals, anticipated M&A deals, and the integration of AI in drug discovery. So, fundamentally sound biotech stocks Theratechnologies (THTX), Harmony Biosciences (HRMY), and Shionogi & Co. (SGIOY) might be solid buys in this month. Keep reading...

Check out These 3 Internet Stocks for Potential Gains

Amplified internet usage, technological advancements, and a rising digital transformation worldwide have driven the internet industry rapidly. To that end, quality internet stocks Wix.com (WIX), Tripadvisor (TRIP), and Yelp (YELP) could be solid buys now. Read on…

Top 3 Financial Services Stocks With Unstoppable Momentum

The financial services sector is set for solid growth owing to global economic trends, technological advancements making digital services more accessible, and changing consumer preferences.Therefore, investors could consider buying fundamentally strong financial services stocks Broadridge Financial Solutions (BR), Banco Macro (BMA), and Yiren Digital (YRD) as they look well-positioned to continue their momentum. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More General Motors Co. (GM) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All GM News