If any U.S. automaker is underappreciated right now, it’s General Motors (NYSE:GM). The company grew its vehicle sales by 14.1% year over year in 2023. That’s not too shabby — yet, GM stock is surprisingly cheap and value seekers should quit hesitating and start buying.
Besides, General Motors is an audacious automaker with a multinational presence in the electric vehicle industry. In addition, General Motors is venturing into a software niche market that could prove lucrative. So, when everything is considered, it is a brilliant move to invest in General Motors in 2024.
What’s General Motors up to Now? You’ll Be Surprised!
General Motors is an old company, but it continues to try out new concepts. For example, General Motors is teaming up with automotive supplier Magna and technology services and consulting company Wipro to develop an automotive software marketplace.
This digital marketplace will play the “matchmaker” among automotive software buyers and sellers (primarily businesses, not individual consumers). It will be called SDVerse, and as I see it, this could be the equivalent of Amazon (NASDAQ:AMZN) for a niche industry.
General Motors is making headway in the market — not only in the U.S., but internationally. The automaker announced that General Motors’ luxury-focused Cadillac Lyriq is again eligible for a $7,500 tax credit in the U.S. The Lyriq became eligible for the tax credit again after General Motors made a after a battery-sourcing change.
In addition, General Motors recently expanded into the European market when it unveiled the Lyriq in France. General Motors already offers the Lyriq in Switzerland. According to Reuters, General Motors “is due to launch” the Lyriq “in other European markets, starting with Germany by year-end.”
GM Stock Is Too Cheap to Ignore
The market doesn’t fully appreciate the growth potential of General Motors in the 2020s. While some other automakers have high valuation multiples, General Motors stock is an overlooked gem for bargain hunters.
General Motors CEO Mary Barra actually spoke upon this topic in a recent interview. “A lot of companies have high price/earnings multiples based on what they are saying the future will be. We have to prove what our future will be, and that is what we have set out to do,” Barra stated.
Indeed, General Motors still has some proving to do in 2024. For the time being, though, General Motors has an ultralow GAAP trailing 12-month price-to-earnings ratio of 5.4x (versus the sector median P/E ratio of 17.83x). The automaker also has a non-GAAP forward P/E ratio of 4.45x (the sector median is 15.53x).
Does the market not know or care that General Motors was last year’s top-selling automaker in the U. S.? Perhaps, stock traders are so busy obsessing about the “Magnificent Seven” that they just aren’t aware of General Motors’ supreme value.
GM Stock: A Smart Play for Proud Cheapskates
General Motors isn’t just a legacy automaker. The company is quite modern and ambitious as it expands its global EV-market presence and helps to develop an automotive software marketplace.
General Motors is a overlooked U.S. automotive-industry icon. Instead of just taking General Motors for granted, consider buying GM stock while it’s still cheap. After all, cheapskates often get the best deals on Wall Street and book big profits in the long run.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
