General Motors CompanyGMNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

⚠️Model Warnings

•Terminal value represents 89% of enterprise value. Valuation highly sensitive to long-term assumptions.

DCF Valuation Summary

Strong Buy

Fair Value: $454.92 per share(market-calibrated)

+485.0%

Upside to Fair Value

Current

$77.76

Pure Model

$544.07

Fair Value

$454.92

Bull Case

$660.46

Bear Case

$462.87

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $544.07.

What's Driving This Ratingfor GM

↓

CapEx normalizing toward maintenance

Historical CapEx is 11.87% of revenue (heavy investment phase). Model fades this to 4.00% by Year 10, freeing up ~$17.8B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 6.49% — below the sector mature average of 12.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $23.0B (10.19% margin).

→

Moderate revenue growth

Analyst consensus projects 0.28% revenue growth, fading to 3.00% by Year 10. Revenue reaches $226.0B (vs $185.0B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $636.29/share (41.2x terminal FCF) while exit multiple gives $451.85/share (29.9x terminal FCF). The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 66.93% indicates efficient cash generation. FCF reaches $25.6B by Year 10 (11.32% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.36

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.64%

Cost of Debt

Pre-tax Cost of Debt0.68%

Tax Rate10.84%

After-tax Cost of Debt0.61%

Equity Weight (E/V)35.43%

Debt Weight (D/V)64.57%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (35.43% × 10.64%) + (64.57% × 0.61%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$185.5B	$191.9B	$203.4B	$209.5B	$226.0B
EBIT	$12.0B	$12.5B	$13.2B	$17.8B	$23.0B
Tax	$1.3B	$1.4B	$1.4B	$1.9B	$2.5B
NOPAT	$10.7B	$11.1B	$11.8B	$15.8B	$20.5B
+ Depreciation	$12.5B	$12.9B	$13.7B	$14.1B	$15.2B
- Capex	$22.0B	$19.4B	$17.0B	$13.9B	$9.0B
- Δ NWC	$86M	$290M	$280M	$587M	$1.1B
Free Cash Flow	$1.1B	$4.3B	$8.1B	$15.5B	$25.6B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$1.0B	$3.7B	$6.2B	$10.6B	$15.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$25.6B

Terminal Growth Rate3.00%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$1.1T

PV of Terminal Value$617.3B

Exit Multiple Method

Year 10 EBITDA$38.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$764.8B

PV of Terminal Value$447.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$77.0B

PV of Terminal Value$617.3B

Enterprise Value$694.4B

(-) Net Debt$109.3B

Equity Value$585.0B

Shares Outstanding919M

Price per Share$636.29

Exit Multiple Method

PV of Projected FCFs$77.0B

PV of Terminal Value$447.8B

Enterprise Value$524.8B

(-) Net Debt$109.3B

Equity Value$415.4B

Shares Outstanding919M

Price per Share$451.85

Pure Model Fair Value

$544.07

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
3.50%	$734.64	$698.05	$663.21	$630.03	$598.43
4.50%	$604.39	$698.05	$663.21	$630.03	$598.43
5.50%	$445.82	$486.76	$544.07	$630.03	$598.43
6.50%	$348.96	$370.90	$399.10	$436.71	$489.35
7.50%	$281.28	$294.47	$310.61	$330.77	$356.70

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$462.87

495.3% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.71

Base Case

$544.07

599.7% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.36

Bull Case

$660.46

749.4% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 1.16

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth0.28%

Year 3 Revenue Growth0.91%

Year 5 Revenue Growth0.83%

Year 7 Revenue Growth1.70%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin6.49%

Terminal EBIT Margin12.00%

Tax Rate10.84%

Historical Capex / Rev11.87%

Terminal Capex / Rev4.00%

NWC / Revenue16.81%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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