Buffett Brain · Research note
Score updated 24 Oct 2026 · analysis from 3 Sept 2026
GM· Consumer Discretionary
General Motors
General Motors' 1.6% ROIC and 6.3% gross margin show a lack of moat and pricing power, making it unattractive for long-term investment.
Buffett fit
Weak fit
Owner
0
Durability
47
Management
37
Price
48
Score updated 24 Oct 2026 · analysis from 3 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of GM, the next decade would involve navigating the complexities of the auto industry, including competition and technological disruption.
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The auto industry is prone to disruption from technological advancements, such as electric vehicles and autonomous driving, and faces regulatory challenges.
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GM's management has been active in , with a 5-year buyback yield of 7.12%, but the retained earnings have not significantly increased market cap, which decreased by 1.20% compared to retained earnings.
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The current of 30.1 and EV/ of 62.9 are high given the company's low growth and profitability.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue of $185 billion indicates significant scale.
- 25-year yield of 7.12% shows active capital return to shareholders.
- 3Interest coverage ratio of 5.3 provides some buffer against debt costs.
- 4Consistent profitability over the last 5 years despite industry challenges.
Concerns
7- 1 of 1.6% is well below the sector top-quintile cutoff of 13.7%.
- 2 of 6.3% is significantly below the sector's 53.9% top-quintile.
- 3Net debt/EBITDA of 5.99 indicates high risk.
- 4EPS CAGR of -25.97% over 5 years shows declining earnings power.
Price history
$75.92+39.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
General Motors designs, builds, and sells vehicles and parts globally under brands like Buick and Cadillac. It operates segments in North America, internationally, and through GM Financial. With a revenue of $185 billion and a net income of $2.7 billion, the margins are notably thin with a 1.6% , indicating challenging unit economics.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Discretionary
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