We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GM vs. RACE: Which Auto-Manufacturer Stock Is the Better Buy Now?
Read MoreHide Full Article
Key Takeaways
General Motors shares climbed 59.2% in six months, outperforming the auto sector on strong sales momentum.
GM's China restructuring lifted Q4 vehicle sales 2.3% YoY, with NEV and BEV sales up for 11 straight quarters.
GM logged $2B in software revenues in nine months, with deferred revenues jumping 90% and subscribers rising.
General Motors Company (GM - Free Report) and Ferrari N.V. (RACE - Free Report) are popular names in the automobile industry. While General Motors, along with its strategic partners, produces, sells and services passenger cars, trucks and parts, Ferrari designs, manufactures and sells sports cars. Ferrari also produces a limited-edition supercar, the LaFerrari, as well as limited series and one-off cars.
Before diving deeper into the fundamentals and prospects of both of these stocks, let’s first look at what sets both of these players apart. GM's strategy focuses on producing a wide range of vehicles that cater to different consumer needs and budgets, while Ferrai with its exclusive and high-end offerings, tends to be on the pricier side.
In the last six months, shares of Ferrari have plunged 32.8%, while General Motors shares have risen 59.2%. While GM has outperformed the Zacks auto sector, Ferrari has underperformed the same.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
So, which stock is the better pick right now? Let’s dig into the fundamentals, growth drivers, and potential risks to see which automaker deserves a spot in your portfolio.
The Case for General Motors
In the third quarter of 2025, General Motors reported net revenues of $48.59 billion, which fell from $48.76 billion recorded in the year-ago period. However, the legacy automaker remained the top-selling automaker in the United States, holding a 17% market share in 2025, up 50 basis points year over year. Strong demand for its leading brands, Chevrolet, Buick, GMC and Cadillac continues to fuel sales growth, driven by popular pickups and SUVs. Upcoming launches like the next-generation Cadillac CT5, redesigned XT5, and the Orion Assembly plant’s relaunch in early 2027, set to produce the Cadillac Escalade and new full-size pickups, underscore GM’s commitment to meet customer demand in the U.S. market.
Its restructuring efforts in China are showing clear progress. The company has been overhauling operations by rightsizing, streamlining dealer networks, cutting costs and rolling out new products. These efforts have paid off, with fourth-quarter vehicle sales in China up 2.3% year over year, marking the third straight quarter of growth. GM expects to deliver full-year profitability in China. GM’s NEV lineup continues to perform strongly, with NEV and BEV sales rising for 11 consecutive quarters since the second quarter of 2023.
General Motors is gaining strong momentum in its software and services business, which is becoming a key growth driver. GM has recognized about $2 billion in revenues from Super Cruise, OnStar and other software offerings in the first nine months of 2025, 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 to 12 million in 2025, while Super Cruise adoption is also accelerating, with more than 625,000 subscribers. GM expects to generate more than $200 million in Super Cruise revenues in 2025, reinforcing its leadership in advanced driving technology.
The Zacks Consensus Estimate for GM’s 2026 EPS implies year-over-year growth of 15%. EPS estimates for 2025 have improved 2 cents in the past 30 days. EPS estimates for 2026 have improved 7 cents in the past seven days.
Image Source: Zacks Investment Research
The Case for Ferrari Stock
Ferrari reported net revenues of $2.06 billion in the third quarter of 2025, up 14.2% from the corresponding quarter of 2024. Total shipments slightly rose to 3,401 units from 3,383 vehicles in the third quarter of 2024. However, shipments in Mainland China, Hong Kong and Taiwan unit and Americas unit declined 12% and 2% respectively.
Per Jing Daily, China’s luxury car buyers, particularly younger consumers, are placing greater emphasis on advanced technology, sustainability and digitally integrated lifestyles. Ferrari’s brand, built on heritage and exclusivity, appears misaligned with these evolving preferences. Although personalization is a global strength for the company, it has not been sufficiently tailored to Chinese cultural tastes and local expectations. While the visibility of Formula 1 drivers helps generate attention, it does not translate into consistent, long-term sales momentum. Moreover, Ferrari’s absence in the electric vehicle segment represents a notable weakness in a market where new energy vehicles account for more than 40% of total new car sales.
Moreover, even as Ferrari lifted its long-term revenue ambition to roughly €9 billion ($10.4 billion) by 2030, the company now expects fully electric models to account for just 20% of its portfolio by that time, a reduction from its earlier 40% target. Hybrid vehicles are projected to represent another 40%, while the remaining share will continue to rely on internal combustion engines. Ferrari does not anticipate introducing a second electric model before at least 2028, pointing to limited demand for high-performance EVs.
Image Source: Zacks Investment Research
Valuation Check: GM vs. RACE
On a valuation basis, GM trades at a more attractive EV/EBITDA multiple than RACE. This suggests that, relative to its earnings before interest, taxes, depreciation, and amortization, General Motors stock is priced more reasonably.
Image Source: Zacks Investment Research
Conclusion
General Motors appears better positioned than Ferrari due to its broader scale, stronger growth momentum, and clearer alignment with industry trends. GM’s diversified portfolio across price points supports resilient demand, while its leadership in the United States, improving performance in China and sustained growth in NEVs strengthen its global outlook.
The company is also building a high-margin software and services business, adding recurring revenue streams. In contrast, Ferrari faces slowing growth, declining sales in key markets like China and limited exposure to EVs amid shifting consumer preferences. Combined with weaker earnings growth expectations, Ferrari’s exclusivity limits upside, whereas GM’s balanced, future-ready strategy makes it a clear winner. While GM sports a Zacks Rank #1 (Strong Buy), RACE has a Zacks Rank #5 (Strong Sell) at present.
Image: Bigstock
GM vs. RACE: Which Auto-Manufacturer Stock Is the Better Buy Now?
Key Takeaways
General Motors Company (GM - Free Report) and Ferrari N.V. (RACE - Free Report) are popular names in the automobile industry. While General Motors, along with its strategic partners, produces, sells and services passenger cars, trucks and parts, Ferrari designs, manufactures and sells sports cars. Ferrari also produces a limited-edition supercar, the LaFerrari, as well as limited series and one-off cars.
Before diving deeper into the fundamentals and prospects of both of these stocks, let’s first look at what sets both of these players apart. GM's strategy focuses on producing a wide range of vehicles that cater to different consumer needs and budgets, while Ferrai with its exclusive and high-end offerings, tends to be on the pricier side.
In the last six months, shares of Ferrari have plunged 32.8%, while General Motors shares have risen 59.2%. While GM has outperformed the Zacks auto sector, Ferrari has underperformed the same.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
So, which stock is the better pick right now? Let’s dig into the fundamentals, growth drivers, and potential risks to see which automaker deserves a spot in your portfolio.
The Case for General Motors
In the third quarter of 2025, General Motors reported net revenues of $48.59 billion, which fell from $48.76 billion recorded in the year-ago period. However, the legacy automaker remained the top-selling automaker in the United States, holding a 17% market share in 2025, up 50 basis points year over year. Strong demand for its leading brands, Chevrolet, Buick, GMC and Cadillac continues to fuel sales growth, driven by popular pickups and SUVs. Upcoming launches like the next-generation Cadillac CT5, redesigned XT5, and the Orion Assembly plant’s relaunch in early 2027, set to produce the Cadillac Escalade and new full-size pickups, underscore GM’s commitment to meet customer demand in the U.S. market.
Its restructuring efforts in China are showing clear progress. The company has been overhauling operations by rightsizing, streamlining dealer networks, cutting costs and rolling out new products. These efforts have paid off, with fourth-quarter vehicle sales in China up 2.3% year over year, marking the third straight quarter of growth. GM expects to deliver full-year profitability in China. GM’s NEV lineup continues to perform strongly, with NEV and BEV sales rising for 11 consecutive quarters since the second quarter of 2023.
General Motors is gaining strong momentum in its software and services business, which is becoming a key growth driver. GM has recognized about $2 billion in revenues from Super Cruise, OnStar and other software offerings in the first nine months of 2025, 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 to 12 million in 2025, while Super Cruise adoption is also accelerating, with more than 625,000 subscribers. GM expects to generate more than $200 million in Super Cruise revenues in 2025, reinforcing its leadership in advanced driving technology.
The Zacks Consensus Estimate for GM’s 2026 EPS implies year-over-year growth of 15%. EPS estimates for 2025 have improved 2 cents in the past 30 days. EPS estimates for 2026 have improved 7 cents in the past seven days.
Image Source: Zacks Investment Research
The Case for Ferrari Stock
Ferrari reported net revenues of $2.06 billion in the third quarter of 2025, up 14.2% from the corresponding quarter of 2024. Total shipments slightly rose to 3,401 units from 3,383 vehicles in the third quarter of 2024. However, shipments in Mainland China, Hong Kong and Taiwan unit and Americas unit declined 12% and 2% respectively.
Per Jing Daily, China’s luxury car buyers, particularly younger consumers, are placing greater emphasis on advanced technology, sustainability and digitally integrated lifestyles. Ferrari’s brand, built on heritage and exclusivity, appears misaligned with these evolving preferences. Although personalization is a global strength for the company, it has not been sufficiently tailored to Chinese cultural tastes and local expectations. While the visibility of Formula 1 drivers helps generate attention, it does not translate into consistent, long-term sales momentum. Moreover, Ferrari’s absence in the electric vehicle segment represents a notable weakness in a market where new energy vehicles account for more than 40% of total new car sales.
Moreover, even as Ferrari lifted its long-term revenue ambition to roughly €9 billion ($10.4 billion) by 2030, the company now expects fully electric models to account for just 20% of its portfolio by that time, a reduction from its earlier 40% target. Hybrid vehicles are projected to represent another 40%, while the remaining share will continue to rely on internal combustion engines. Ferrari does not anticipate introducing a second electric model before at least 2028, pointing to limited demand for high-performance EVs.
Image Source: Zacks Investment Research
Valuation Check: GM vs. RACE
On a valuation basis, GM trades at a more attractive EV/EBITDA multiple than RACE. This suggests that, relative to its earnings before interest, taxes, depreciation, and amortization, General Motors stock is priced more reasonably.
Image Source: Zacks Investment Research
Conclusion
General Motors appears better positioned than Ferrari due to its broader scale, stronger growth momentum, and clearer alignment with industry trends. GM’s diversified portfolio across price points supports resilient demand, while its leadership in the United States, improving performance in China and sustained growth in NEVs strengthen its global outlook.
The company is also building a high-margin software and services business, adding recurring revenue streams. In contrast, Ferrari faces slowing growth, declining sales in key markets like China and limited exposure to EVs amid shifting consumer preferences. Combined with weaker earnings growth expectations, Ferrari’s exclusivity limits upside, whereas GM’s balanced, future-ready strategy makes it a clear winner. While GM sports a Zacks Rank #1 (Strong Buy), RACE has a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks Rank #1 stocks here.