General Motors Co (GM) stock intrinsic value fair value estimate & owner earnings analysis

General Motors designs, builds and sells Chevrolet, GMC, Buick and Cadillac vehicles, led by full-size pickups and SUVs in North America, and runs GM Financial, a captive lender that finances and leases those vehicles. Shares are worth roughly $72 in our base case, $34 in the bear case and $95 in the bull case. How we measure earnings. We start from operating cash flow, strip out swings in working capital (a $9.1B inflow in 2025 that we do not treat as recurring), subtract stock compensation (about $0.33B a year) and subtract maintenance capital spending (about $9-10B a year, of which only a small growth slice is excluded). On that basis owner earnings ran from about $7.6B (2018) to $11.4B (2024) and were $8.2B in 2025, or $8.40 a share; the eight-year median is about $10.8B in total. Impairments and EV-related write-downs are non-cash and are added back, but they signal that past EV spending earned little. One adjustment we make to the level. The standard measure ignores the cash GM Financial spends buying vehicles it then leases: net lease-vehicle purchases were about $5.7B in 2025, $4.4B in 2024 and $0.6B in 2023, while depreciation on those leased vehicles (about $4.9B a year) is added back in operating cash flow. That is a real recurring cost of staying in the leasing business, so we deduct roughly $3B a year and take normalized owner earnings of about $7B, using the last three years as the guide to the current business. At about 920 million diluted shares (down from 1.4 billion in 2019 after large buybacks) that is about $7.60 a share. Base case. $7B a year, held flat for 15 years, then fading to nothing. We credit no growth: the pickup and SUV franchises have produced positive owner earnings every year from 2018 through 2025, through the 2020 shutdown, which is why we allow a long life, but new products, EV volume, autonomous driving and margin gains are left out because none is secured. In 2025 owner earnings per share fell 17% versus 2024; we assume 0% for year one (flat off our normalized level, which already sits below 2024), not a rebound. The 2025 filing says charges tied to EV supplier negotiations should be significantly smaller in 2026, but we do not rely on that. Bear case. Owner earnings of about $4.5B a year for 10 years, then nothing. This reflects the lower 2025 result once lease reinvestment is deducted (about $5B), continued import-tariff costs the company describes as a risk, EV cash charges, and a cyclical downturn like 2020. GM Financial's heavy debt funding worsens the downside in a recession. Bull case. About $9B a year for 15 years, in line with the strongest years (2019-2022 and 2024) after the lease deduction, if truck and SUV profitability holds and EV losses stop growing. What could make this wrong. Auto profits are cyclical, tariffs and EPA rule changes are outside GM's control, and the China joint ventures and GM Financial credit quality add uncertainty. We could not fully break out Cruise share-based expense in 2021-2022, and prior-year figures use each year's own filing. The margin-of-safety price includes a wide cushion because of this cyclicality and leverage.