F vs. GM: Which Auto Giant Is the Better Investment After Q3?

When it comes to iconic American automakers, General Motors GM and Ford F remain two of the strongest pillars of the industry. Both have weathered economic cycles, pushed forward on innovation, and are navigating the complex transition toward electric and software-defined vehicles. Both companies delivered better-than-expected results in the third quarter of 2025.Over the past six months, GM has surged 41%, outperforming Ford’s growth of 23%. Let’s take a closer look at their fundamentals, growth prospects and challenges to figure out which stock is a better investment option now. Image Source: Zacks Investment ResearchQ3 Results ReviewFord’s third-quarter 2025 adjusted EPS of 45 cents surpassed the Zacks Consensus Estimate of 38 cents but declined from 49 cents recorded in the year-ago quarter. The company’s consolidated third-quarter revenues came in at $50.5 billion, up 9.3% year over year. F’s total automotive revenues came in at $47.2 billion, beating the Zacks Consensus Estimate of $42.7 billion and rising from $43 billion generated a year ago.Ford Pro remains a key growth engine, supported by strong order books, rising demand for Super Duty trucks, and expanding software and service offerings.Strength across vehicles, software and physical services underpins the segment’s momentum. Paid subscriptions rose 8% to 818,000 in the third quarter.Ford Motor Company Price, Consensus and EPS Surprise Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company QuoteGeneral Motors’ third-quarter 2025 adjusted EPS of $2.80 beat the Zacks Consensus Estimate of $2.28 but decreased from the year-ago quarter’s $2.96. Revenues of $48.59 billion topped the Zacks Consensus Estimate of $43.61 billion but fell from $48.76 billion recorded in the year-ago period.General Motors is gaining strong momentum in its software and services business, which is becoming a key growth driver. GM notified in its third-quarter call that it has recognized about $2 billion in revenues from Super Cruise, OnStar and other software offerings year to date, with deferred revenues reaching $5 billion at the end of the third quarter — up more than 90% year over year. OnStar’s global subscriber base grew 34% to more than 11 million, with the company on track to exceed 12 million by year-end.General Motors Company Price, Consensus and EPS Surprise General Motors Company price-consensus-eps-surprise-chart | General Motors Company QuoteOutlookGeneral Motors has raised its FCF and EPS guidance for 2025. Adjusted automotive free cash flow is forecast at $10-$11.0 billion compared with $7.5 billion-$10.0 billion earlier. Adjusted diluted EPS is forecast at $9.75-$10.50 compared with the prior guidance range of $8.25-$10 billion.GM expects 2026 to be a stronger year than 2025, with a clear focus on positioning the business for long-term profitability. Key levers for improvement include reducing EV-related losses, managing warranty costs, offsetting tariff impacts, optimizing regulatory compliance and controlling fixed costs. The company plans to continue right-sizing its EV production capacity to better match demand. A top priority is restoring adjusted EBIT margins for GM North America to the 8%-10% range over time.Meanwhile, Ford has trimmed its guidance for 2025. Ford is grappling with supply disruptions following the fire at Novelis’ aluminum plant. The incident is expected to result in a fourth-quarter EBIT headwind of $1.5-$2 billion and a free cash flow hit of $2-$3 billion. It now expects full-year 2025 adjusted EBIT in the range of $6-$6.5 billion, down from $10.2 billion in 2024 and the previous forecast of $6.5-$7.5 billion. It expects adjusted free cash flow in the range of $2-$3 billion, down from the prior guidance of $3.5-$4.5 billion, as well as $6.7 billion recorded in 2024. Balance SheetBoth automakers possess strong liquidity to weather short-term challenges. General Motors had total automotive liquidity of $35.7 billion as of Sept. 30, 2025, including around $21.8 billion of cash/cash equivalents/marketable debt securities. Ford ended the third quarter of 2025 with more than $54 billion in liquidity, including $33 billion in cash. However, GM displays a lower long-term debt-to-capitalization ratio compared to Ford. Image Source: Zacks Investment ResearchDividend and Buyback AppealFord has a high dividend yield of more than 4%, way better than the S&P 500’s yield of 1.1%, on average. The company targets distributions of 40-50% of FCF going forward, demonstrating its commitment to shareholder return. Meanwhile, GM has a dividend yield of less than 1%.GM notified in its third-quarter earnings call that it bought back more $3.5 billion worth of stock year to date (including $1.5 billion in the third quarter) despite a challenging macro environment. As of the third-quarter end, the company had $2.8 billion remaining under its share repurchase program. GM’s strategy has effectively reduced its outstanding shares, boosting per-share earnings and enhancing shareholder value.A Look Into ValuationF is trading at a forward earnings multiple of 9.74X, above its median of 7.48X over the last five years. GM’s forward earnings multiple sits at 6.26X, slightly above its median of 5.54X over the last five years.  Image Source: Zacks Investment ResearchWhat Do Estimates for GM & F Say?The consensus mark for Ford’s 2025 EPS implies a year-over-year decline of 41.3%. The EPS estimate for 2026 indicates an uptick of 29% from the 2025 projected figures. EPS estimates for F have been witnessing a mixed trend. Image Source: Zacks Investment ResearchThe consensus mark for GM’s 2025 EPS implies a year-over-year decline of 3%. The EPS estimate for 2026 calls for an uptick of 11% from the 2025 projected figures. The EPS estimates for General Motors have been witnessing an upward trend. Image Source: Zacks Investment ResearchOur Pick: GMBetween these two automotive giants, General Motors emerges as the stronger contender for investors seeking growth and stability. Its upgraded guidance, upward EPS revisions, expanding software and services revenue base, and disciplined cost management highlight its operational resilience and market leadership. Importantly, the company also noted that it does not expect any material impact from the Novelis fire.Ford, despite its rich dividend yield and a strong Pro segment, faces significant near-term challenges. Recall pressures, trimmed guidance following the Novelis disruption and a steep projected EPS decline for 2025 raise concerns.Given these dynamics, General Motors currently sports a Zacks Rank #1 (Strong Buy), reflecting its improving outlook and upside potential, while Ford holds a Zacks Rank #3 (Hold) as investors wait for clearer signs of recovery.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. 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Click to get this free report Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks