The Goodyear Tire & Rubber Company (GT): A Bull Case Theory
The Goodyear Tire & Rubber Company's share has been trading at $9.79 as of March 7th, with a trailing P/E of 40.79 and forward P/E of 6.61. The company generated nearly $5 billion in revenue in Q4 2024 but delivered under $500 million in EBITDA and only $72 million in GAAP net income. Despite efficiency issues and management's skeptical views on its ability to drive long-term value, the company's financial stability provides support for a potential turnaround.
- The bulls' thesis on GT is rooted in its stable cash flow and potential for gradual improvement, which could be supported by secular tailwinds in the tire industry.
- However, given the significant risks associated with the investment, it remains unclear whether GT can overcome its operational challenges and deliver long-term returns that justify the current valuation.