General Motors Co. (GM, Financial) stock has been on the rise for a year straight with recent jumps coming in part thanks to the announcement of the revival of their Hummer brand under a new electric vehicles initiative.
GM's stock took a dive in March of 2020 in the midst of the ongoing pandemic as the demand for vehicles dropped off, reaching a low point of $16.80 per share. Share prices began to recover alongside the demand for vehicles toward the end of the summer of 2020. By October, share prices were approaching pre-pandemic levels and the announcement for GM's new Hummer EV supertruck thrust the company back into the spotlight.
On April 3, GM unveiled an SUV version of the new Hummer set to reach customers in 2023. The SUV version will feature the same class-topping 11,500 foot-pounds of torque, but will have less power and be slightly slower than the truck version due to a smaller battery. The SUV will debut as a special "Edition 1" launch model topping the range at $110,595. GM's truck option has already sold out of the $112,595 priced "Edition 1" optioned model.
The truck version is slated for public sale in the fall of this year. Pricing for both the truck and SUV variants will come in different tiers ranging from $79,995 to $110,000 depending on options and are expected to open for public sale between 2022 and 2024. The Hummer models are set to lead GM's $27 billion shift to electric vehicles heading toward 2025.
As of April 6, GM's stock was trading at $63.18 per share with a market cap of $90.87 billion. According to the GF Value Line, the shares are significantly overvalued.
GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rank of 5 out of 10 and a valuation rank of 3 out of 10. There are currently four severe warning signs issued for the company, including declining revenue per share and an Altman Z-Score placing the company in the distress column. Value for the company has taken a hit due to the weighted average cost of capital exceeding the return on invested capital.
Top gurus invested in GM include Mario Gabelli (Trades, Portfolio), Jim Simons (Trades, Portfolio)' Renaissance Technologies and Jeremy Grantham (Trades, Portfolio).
Disclosure: Author owns no stocks mentioned.
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