GM (GM) Stock Drops After Q3 Earnings Defy The Selloff
General Motors stock took a hit today, dropping about 7% to roughly US$77 after its Q3 2026 earnings hit the tape. That move jars, because the headline print was powerful. GM delivered about US$50b of revenue and adjusted earnings per share of US$3.70, backed by US$4.1b in adjusted earnings before interest and tax.
Short-term traders focused on the red on the screen. Long-term holders are more likely to focus on what a quarter like this means for multi year profit forecasts, cash generation and whether the current share price still lines up with those earnings trajectories.
Love the strength in General Motors’ earnings print but concerned about whether the share price move is signaling risk you do not want to carry alone? Benchmark GM against a wider set of balance sheet focused ideas in our list of solid balance sheet and fundamentals stocks (25 results).
Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs. Q3 2025): US$50,015 million vs. US$48,591 million (up about 3%)
- Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$3,304 million vs. US$1,297 million (more than doubled)
- Basic EPS (Q3 2026 vs. Q3 2025): US$3.79 vs. US$1.37 (very large increase, almost 3x)
- Adjusted EBIT (Q3 2026 vs. Q3 2025): US$4.1b vs. about US$3.36b (up roughly 22%)
General Motors Bull Case: Cash, Software, Trucks On Trial
The bullish pitch is that General Motors can turn cash, software and capital discipline into lasting per share earnings power.
"The main thing that has to go right is that General Motors continues to generate robust free cash flow while executing on higher margin software, subscriptions, and quality improvements so it can keep funding share repurchases, ICE and EV programs, and battery partnerships without stressing the balance sheet."
Q3 hits several of those checkpoints. Adjusted automotive free cash flow reached US$5.9b in the quarter, with full year guidance raised to a range of US$11.5b to US$12.5b. Deferred software and services revenue climbed around 40%, a concrete sign that higher margin digital income is scaling. Warranty costs improved by roughly US$1.1b year to date, which directly supports the quality and margin part of that promise. A fresh US$20b buyback authorization signals management still leans into that cash conversion story.
One Narrative disagrees with today's price. → See where this Narrative says General Motors should trade.
General Motors Bear Case: EV Cuts And Hybrid Lag Still Bite
Bearish investors worry General Motors is leaning too hard on trucks and ICE profits while falling behind where demand is moving.
"Even as GM invests in new Gen VI V8 and 8.3L Duramax diesel engines to support profitable ICE trucks and SUVs, the lack of a broad hybrid portfolio when hybrids reach 19% of U.S. retail sales exposes the company to further market share loss if regulations or fuel prices shift again."
Q3 U.S. sales fell about 6% and EV volumes dropped 62%, even as Silverado gained 13.3%. That mix reinforces the concern. Hybrids are only just reappearing and 2027 launches for more petrol Cadillacs leave a multi year gap where hybrid share growth can hurt GM’s position.
Hunt For Mispriced Earnings Power
General Motors shows that sharp earnings changes can diverge from short-term price moves. The real opportunity is researching stocks that may be undervalued before the market reassesses them.
- Company 1 - 38% below our estimate - builds a device recommerce network aligned with subsidy-backed trade-in programs and eco policies.
- Company 2 - 45% below our estimate - runs a relationship-focused banking platform that relies on experienced lenders navigating a complex integration.
- Company 3 - 25% below our estimate - supplies liquid cooling and power systems supporting energy-intensive AI racks and lower-water data centers.
Three companies from the same screener. Open every one of the 34 undervalued companies on it →
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com