Remember when everyone was doom-scrolling about the economy? Well, General Motors just walked into the room and said “hold my beer.” The Detroit giant absolutely demolished earnings expectations yesterday, and frankly, it’s the kind of beat that makes you wonder if someone’s been sandbagging their forecasts.
Here’s the tea: GM posted adjusted earnings of $2.80 per share when Wall Street was expecting a measly $2.31. That’s not just beating expectations – that’s lapping them twice and asking if they want to go again. Revenue hit $48.59 billion versus the expected $45.27 billion, because apparently GM’s accountants have been taking performance-enhancing supplements.
But wait, there’s more! (I know, I sound like a late-night infomercial, but stick with me.) The company also raised their full-year guidance like they’re some kind of overachiever at a parent-teacher conference. They now expect Q4 EBIT between $12-13 billion, up from their previous “eh, maybe $10-12.5 billion” estimate. That’s the financial equivalent of saying “Actually, I think I can bench press more than I thought.”
Now, before you start throwing your life savings at GM stock (please don’t), let’s talk about what the math nerds are saying. The quantitative analysis gets a bit wonky here, but bear with me – it’s actually pretty cool.
Since 2019, GM’s 10-week return patterns look like a slightly drunk bell curve. Most of the time, the stock likes to hang out around $67.20, which is nice and predictable. But here’s where it gets interesting: in the last 10 weeks, GM has been on a 7-3-U pattern – seven up weeks, three down weeks, with an overall upward vibe that would make a yoga instructor jealous.
The fancy statistical models are suggesting GM might actually cluster around $66.80 going forward, which is slightly below that comfortable $67.20 zone. But – and this is a big but – the upside potential is looking juicier than usual. Think of it like a risk-reward seesaw that’s been tilted in favor of the “reward” side.
What does this mean for us mere mortals? Well, GM is basically presenting what statisticians call a “bimodal distribution,” which sounds scary but really just means the stock could either do really well or… not so much. The extended risk and reward tails mean there’s more potential for both spectacular gains and face-palm losses.
The bottom line? GM just proved that maybe, just maybe, the consumer economy isn’t as dead as everyone thought. When a major automaker can beat earnings by that much and confidently raise guidance, it suggests people are still buying cars – shocking, I know.
Should you buy GM stock? That’s between you and your financial advisor (and maybe your therapist). But if you’re the type who likes a little statistical spice with your investment decisions, GM’s current setup is offering both higher risk and higher reward potential than usual. Just remember: past performance doesn’t guarantee future results, but it sure makes for interesting cocktail party conversation.