GM Stock Returns 50.6% Despite Falling Margins and Revenue

General Motors (GM) shares delivered a 50.6% return in the year to October 14, 2026, significantly outpacing the 17.3% gain for the S&P 500. This performance occurred even as the company’s underlying business failed to grow, with revenue slipping 1.1% over the twelve months to June 2026 and operating margins contracting sharply.

The divergence between share price and fundamental performance became evident well before the current period. During a May 5, 2025 conference call, management revised full-year adjusted profit guidance to account for a tariff exposure estimated at $4 billion to $5 billion. Financial results for April to June 2025, filed on July 22, 2025, showed the operating margin falling to 4.5%, down from 8.1% in the same quarter of 2024. Despite these weaker fundamentals, GM shares returned 23.9% from April 14 to October 13, 2025.

The gap between valuation and earnings widened further in late 2025. In the October to December 2025 quarter, GM reported an operating loss of $3.65 billion. By June 2026, the trailing twelve-month operating margin sat at roughly 1.0%, a level no quarter end from September 2016 to June 2026 had previously reached. Over that same twelve-month period ending in June 2026, GM’s valuation rose to 0.372 times sales, up from 0.313 a year earlier. Investors paid more for each dollar of sales while the company earned less on it.

This trend persisted into the first half of 2026. The operating margin for January to March came in at 6.7%, down from 7.6% a year earlier, and fell further to 3.0% in April to June, compared with 4.5% in the prior year period. During this time, GM stock trailed the broader market, returning 7.2% from April 15, 2026, while the S&P 500 gained 10.5%.

Looking ahead, the operating margin in the quarterly report expected on or around October 20, 2026, will be a key indicator of whether the business is catching up with its stock price. A July to September 2026 margin above the 2.2% reported for the same period in 2025 would suggest improvement; a margin below that threshold would confirm the existing split between valuation and performance remains intact.