General Motors reported adjusted earnings of $3.70 a share in the first quarter of 2026, a 33% jump from $2.78 a year earlier and a 41.8% beat of the Zacks consensus estimate of $2.61, even as revenue slipped to $43.62 billion.
The numbers produced the market move: GM shares have added about 9.8% in the month since the last earnings report and the stock rose 16% in a five-day winning streak that pushed the company's market capitalization to $77 billion after a roughly $10 billion surge over five days.
On the profit line, total company EBIT-adjusted climbed 21.9% year over year to $4.25 billion and the EBIT-adjusted margin widened to 9.7%. GM North America generated $36.4 billion in net revenues and produced $3.66 billion of EBIT-adjusted with a 10.1% margin; management said that margin included a 1.5-percentage-point benefit from a tariff adjustment. GM International posted $2.9 billion in net revenues and $123 million of EBIT-adjusted, while China equity income rose to $165 million.
Several operational metrics underpinned the quarter: GM retained its leadership in total U.S. sales with 626,000 deliveries, GM North America reported 793,000 wholesale vehicle sales, and dealer inventory ended the quarter at 516,000 units, down about 6% year over year. Management cited incentives at 4.4% of MSRP versus an industry average of 6.6% and an average transaction price near $52,000.
Digital and finance businesses supplied recurring-revenue momentum. OnStar ended the quarter with deferred revenues of $5.8 billion, up more than 50% year over year. GM Financial generated $4.27 billion in net revenues and delivered EBT-adjusted of $688 million. Recognized Super Cruise revenues increased roughly 85% year over year as the company added about 50,000 new Super Cruise customers during the quarter and users drove 1.0 billion miles using the system; GM expects to surpass 850,000 paid Super Cruise subscribers by the end of 2026.
The context for investors today is simple: the quarter showed strong execution in the core auto business while digital services and tariff accounting both boosted the headline profit picture. Trailing metrics are robust—General Motors delivered 76.6% returns over the last year and trailing twelve-month free cash flow stands at about $13.59 billion—yet valuation signals are mixed. Simply Wall St projects free cash flow of $10.14 billion in 2026 and $11.71 billion by 2028, estimates an intrinsic value of $122.61 per share and pegs the stock now trading at $84.12, a 31.4% discount to that DCF estimate.
That valuation sits against a P/E of 31.17x for GM, well above the auto industry average of 16.91x but below the peer group average of 42.82x; Simply Wall St's Fair Ratio for General Motors is 30.67x. Investors have rewarded the quarter, but the market is pricing a premium despite revenue growth flat to slightly negative year over year—a 0.9% slip versus last year and a small miss of the consensus revenue estimate of $43.94 billion by 0.7%.
The quarter also contains an internal tension: margins benefited materially from a one-time tariff adjustment worth 1.5 percentage points in North America, raising the question of how much of the improved profitability is recurring. Revenue weakness in a competitive environment, plus an average transaction price near $52,000, could test volume sustainability, even with dealer inventory leaner and incentives below the industry average.
Further friction lies in the fast-growing digital stack. OnStar's deferred revenues and Super Cruise's rising subscriber base point to higher-margin, recurring revenue ahead, but the company must prove it can convert miles driven and new customers into the kind of free cash flow the valuation implies. Simply Wall St’s forward free cash flow projections are lower than GM’s current trailing figure, highlighting the gap between recent cash generation and analyst expectations for 2026.
The clearest conclusion from the quarter is that general motors has given investors plenty to cheer: an earnings beat, expanding margins and a clear digital growth story. Whether the rally endures will depend on two measurable things in the coming quarters—can the company sustain EBIT margins without the tariff-related boost, and can Super Cruise and OnStar convert rapid user growth into the steady, higher-margin cash flow that justifies a premium multiple.
