Yield

Yield

General Motors clears the framework's adjusted-FCF yield bar on every reasonable basis: the 3-year average adjusted FCF computes to roughly 13.5% on today's $87.9B market cap, GM's own automotive free cash flow to about 12%, and consensus forward FCF to 11.0%–13.6% through 2028 — all above the 10% default line. The subtlety is what "reported FCF" means for an automaker that consolidates a $114B finance book, and that the framework treats a car company screening cheap on FCF yield as a value-trap signature, not a dislocation.

The adjustment, line by line

The framework's yield basis is adjusted FCF: reported free cash flow, minus stock-based compensation, minus the trailing five-year average of acquisition spend. For GM two of those three terms are small. The company discloses no business-acquisition line in its consolidated statement of cash flows — its 2025 purchase of the Cruise noncontrolling interests was an equity transaction, not an asset buy [1] — so the five-year average acquisition adjustment is zero. Stock-based compensation runs $0.3–0.6B a year, a rounding item against $7–18B of FCF [2].

Adjusted FCF = reported FCF − SBC − 5-yr avg acquisition spend; derived from company filings. Reported FCF (operating cash flow − capital expenditures) from the consolidated cash-flow statement [3]; SBC from the statements of equity [4]; FY2020–22 SBC from the FY2022 10-K [5].

The deterministic feature file returned adjusted FCF as not_computable, flagging SBC as missing for all ten years. That is a pipeline artifact, not a real gap: GM does not carry a discrete "stock-based compensation" add-back on its consolidated cash-flow statement — the expense sits in the statements of equity ($541M in FY2025, $552M in FY2024, $259M in FY2023) [6]. The adjustment is reconstructed here from the primary filings and recorded in the data gaps below.

The heavier caveat is the reported-FCF term itself. GM consolidates GM Financial, a captive lender with a $114B debt book, and the FY2025 consolidated operating cash flow of $26.9B was lifted by a $9.1B favorable swing in operating assets and liabilities [7]. So the FY2025 reported FCF of $17.6B — and the ~19% mechanical yield it implies — overstates the sustainable cash the automotive business threw off. GM's own automotive free-cash-flow measure gives the cleaner number.

GM adjusted automotive FCF = automotive operating cash flow − capital expenditures ± management actions, as reported by the company [8].

The yield, three ways

At the July 28, 2026 close of $90.30 and 973M shares, GM's market cap is $87.9B (derived: fit_features.market_cap). Against that, three yield bases converge in a band of roughly 11–16%:

Yields = FCF ÷ $87.9B market cap. 3-yr average adjusted FCF (FY2023–25) = $11.8B; GM automotive FCF FY2025 = $10.6B [9]; consensus FY2025 FCF = $9.65B (derived: fit_features.consensus_forward_yield).

The current mechanical adjusted yield on FY2025 reported FCF is 19.4% ($17.0B ÷ $87.9B), but that leans on the working-capital-inflated consolidated number and should not be read as the run-rate. The three-year average adjusted FCF of $11.8B — which smooths the FY2025 spike against FY2023's $9.7B and FY2024's $8.7B — computes to 13.5%. GM's own automotive FCF of $10.6B computes to 12.1%. Taking the most conservative anchor available, consensus forward FCF, still lands at 11.0%.

The company's own multi-year yield baseline (fit_features.yield_baseline) is not_computable — the feature pipeline could not reconstruct historical same-year yields. Qualitatively, GM has not shown the fortress "jump" signature the framework hunts for (a stable ~3.5–4% name spiking to 8–9% on a fear scare — Microsoft, Meta). GM has chronically screened cheap on FCF yield for a decade; today's double-digit yield is a continuation of that pattern, not a dislocation away from a calm baseline. That distinction matters, and it cuts against the setup rather than for it.

Which bar applies

The balance-sheet class selects the reference line. The feature file returned balance_sheet_class as unknown (FY2025 debt/EBITDA not resolved); reconstructing from the primary filings shows why the answer is genuinely two-sided for an automaker with a captive finance arm.

Automotive cash + marketable securities $21.7B and total automotive debt $16.2B [10]; consolidated cash $20.9B + marketable securities $6.7B and GM Financial debt $114.0B [11].

On an automotive basis GM carries about $5.5B of net cash — $21.7B of automotive cash and marketable securities against $16.2B of automotive debt, backed by $35.7B of total automotive liquidity [12]. By the framework's mechanical rule (net debt ≤ 0 → fortress), that maps to the 8–9% fortress line. On a consolidated basis GM shows $102.6B of net debt — but $114.0B of that sits at GM Financial, a matched-funded lender whose debt is carried against roughly $123B of finance receivables and leased vehicles [13], not automotive leverage.

The honest reference line here is the 10% default bar, not the 8–9% fortress line: GM's automotive book is net cash, but this is a low-margin, capital-intensive, cyclical automaker, not a net-cash quality compounder of the kind the fortress anchor describes. On that 10% bar, the position in plain arithmetic: 13.5% on the 3-year average adjusted FCF — roughly 350 bps clear; 12.1% on FY2025 automotive FCF — about 210 bps clear; 11.0% on consensus forward FCF — about 100 bps clear. GM sits above the bar on all three, and would clear the lower fortress line by a wider margin still.

Normalized mid-cycle yield

GM is meaningfully cyclical, so the current-year figure needs a normalization check — and here it works in two directions at once. On earnings, FY2025 was depressed: GAAP operating income fell to $2.9B from $12.8B as GM absorbed a $7.9B EV strategic-realignment charge plus China restructuring and other special items totaling $9.8B of pre-tax adjustments [14]. On cash, FY2025 reported FCF was inflated by the $9.1B working-capital release. The two distortions pull opposite ways, so neither the $17.6B reported FCF nor the depressed GAAP earnings is a mid-cycle read.

The workings for a mid-cycle estimate: average GM's own automotive FCF across FY2024–25 ($14.0B and $10.6B → ~$12.3B), and cross-check against consensus, which sees FCF stepping from ~$9.7B (FY2025) to ~$11.9B (FY2028). Both point to a mid-cycle adjusted FCF of roughly $11–12B. On today's $87.9B market cap that normalizes to a 12.5%–13.5% mid-cycle yield — still comfortably above the 10% bar. A skeptic who normalizes on a weaker window (say, the trough automotive FCF of a recession year nearer $8–9B) lands around 9–10%, right at the line; the assumption that decides it is whether full-size truck and SUV volumes and pricing hold, which is where the Durability tab does its work.

The consensus check

CapIQ consensus free cash flow — the vendor's free_cash_flow mean, the closest direct proxy for adjusted FCF — clears the 10% bar in every forecast year, and the yield rises through the window as the EV-charge and tariff drag roll off.

Consensus FCF mean ($B) and implied yield on $87.9B market cap (derived: fit_features.consensus_forward_yield, source data/sp/estimates.json; CapIQ vintage as of the run date). FY2029 FCF mean is not disclosed by the vendor.

Because consensus forward FCF already clears the bar — 11.0% in FY2025 rising to 13.6% by FY2028 — the yield pillar does not require a mean-reversion underwrite. In the framework's terms, the sell side already agrees the cash is there; what is depressed is GAAP earnings and sentiment, not forward free cash flow. That is the "fear, not fundamentals" configuration on this one axis. The consensus does not sit below the bar, so there is no negative-FCF path to underwrite here — unlike the classic healthcare-forecasting-error setup.

One honest qualifier the framework insists on: it treats car companies as an explicit exclusion — "they screen cheap on FCF yield and never create long-term shareholder wealth; a value trap." GM clearing the yield bar is precisely the cheap-on-FCF-yield screen the exclusion warns about. The yield arithmetic passes; whether that yield is earned by a durable business is the question the Durability and Fit tabs decide, and it is not resolved on this page.

FCF / revenue trend

Conversion is volatile rather than trending. Reported FCF margin ran 6.3% in FY2023, dipped to 5.4% in FY2024, then jumped to 10.5% in FY2025 on the working-capital release [15].

FCF ÷ revenue, from reported financials, FY2021–25 [16].

Stripping the FY2025 spike, automotive FCF/revenue has held in a roughly 6–8% band — neither improving nor deteriorating on a trend basis. That is not the sliding-conversion pattern that would undercut a levered-flywheel case, but it is also not a widening one: GM converts revenue to cash at a steady, mid-single-digit automotive rate, consistent with a mature manufacturer rather than a compounder. Revenue itself fell 2.1% in FY2025 to $168.0B after two years of high-single-digit growth (derived: fit_features.revenue_trajectory) — one year of decline, not the three consecutive years the framework flags as a structural-decline disqualifier.