Latest news with #ALLY
Yahoo
14-05-2025
- Business
- Yahoo
What Makes Ally Financial (ALLY) an Attractive Investment?
The London Company, an investment management company, released 'The London Company Mid Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. After two years of robust earnings, US equities entered a correction territory in Q1. The portfolio declined 4.3% (-4.5%, net) during the quarter compared to a 3.4% decrease for the Russell Midcap Index. Sector exposure was a headwind to the strategy's relative performance in the quarter. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025. In its first-quarter 2025 investor letter, The London Company Mid Cap Strategy highlighted stocks such as Ally Financial Inc. (NYSE:ALLY). Ally Financial Inc. (NYSE:ALLY) is a digital financial company that offers various digital financial products and services. The one-month return of Ally Financial Inc. (NYSE:ALLY) was 13.36%, and its shares lost 10.13% of their value over the last 52 weeks. On May 13, 2025, Ally Financial Inc. (NYSE:ALLY) stock closed at $36.65 per share with a market capitalization of $11.26 billion. The London Company Mid Cap Strategy stated the following regarding Ally Financial Inc. (NYSE:ALLY) in its Q1 2025 investor letter: "Initiated: Ally Financial Inc. (NYSE:ALLY) - Largest digital-only bank in the U.S., best known for its strong position in auto lending. It focuses on prime borrowers, making its loan book higher quality than many competitors. With a new leadership team in place, ALLY is streamlining operations, cutting costs, and focusing on its most profitable areas. While current earnings are lower than normal, we believe the credit performance of ALLY's auto loan book should improve reflecting higher net interest margin and cost controls. As conditions normalize, ALLY could resume stock buybacks and deliver meaningful earnings growth. We see this as a compelling opportunity to invest in a quality business at à discount, with clear catalysts that could drive solid returns over the next few years." Ally Financial Inc. (NYSE:ALLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Ally Financial Inc. (NYSE:ALLY) at the end of the fourth quarter which was 56 in the previous quarter. While we acknowledge the potential of Ally Financial Inc. (NYSE:ALLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Ally Financial Inc. (NYSE:ALLY) and shared the list of dividend stocks targeted by short sellers. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
Ally Financial Inc. (ALLY): A Bull Case Theory
We came across a bullish thesis on Ally Financial Inc. (ALLY) on Substack by TSOH Investment Research. In this article, we will summarize the bulls' thesis on ALLY. Ally Financial Inc. (ALLY)'s share was trading at $32.51 as of May 7th. ALLY's trailing and forward P/E were 57.92 and 9.03 respectively according to Yahoo Finance. An executive in a corporate boardroom discussing the future of financial services. Ally Financial appears to be on the verge of a potential turnaround, driven by improving fundamentals in its core auto lending business, strategic realignment, and a shifting macro backdrop. While the company has underperformed in recent years—largely a result of missteps in underwriting and questionable capital allocation—management has taken steps to refocus the business on areas where it has competitive advantages. Notably, the decision to exit the credit card segment demonstrates a commitment to streamline operations and concentrate on its most defensible franchises: Dealer Financial Services, Corporate Finance, and Deposits. These adjustments come at a time when end-market dynamics, particularly in used auto financing, are becoming more favorable. In auto lending, Ally originated $10.2 billion in new loans in Q1 FY25 at an attractive 9.8% yield, supported by a record 3.8 million auto loan applications. This robust pipeline gives the company optionality to manage pricing and credit quality, evidenced by a healthy 44% share of originations coming from the prime (S-tier) segment, a substantial improvement from 2022 levels. Simultaneously, Ally is navigating a unique challenge in its deposit franchise, which heavily depends on customers sensitive to interest rates. The company has strategically reduced its online savings account (OSA) APY from 3.8% to 3.6% in March 2025, despite no change in the fed funds rate, signaling a shift towards profitability over aggressive deposit gathering. This more measured pricing strategy has not yet impacted customer acquisition, with Ally Bank adding 60,000 customers in Q1 and total customer count growing 5% year-over-year to approximately 3.3 million. With over $38 billion in CDs maturing this year—representing more than 20% of Ally's total funding—the expected repricing at lower rates should help reduce funding costs by approximately 20 basis points, contributing to a projected 30 basis point improvement in net interest margins by FY26. This could add roughly $0.25 to annual EPS for every five basis point NIM expansion, providing a meaningful earnings tailwind. Credit quality, a sore spot in recent years due to problematic underwriting in the 2022 vintage, is also showing signs of improvement. The 2022 cohort will account for only 10% of the auto book by year-end, and net charge-offs (NCOs) for retail auto loans declined year-over-year for the first time since late 2021. Still, Ally's progress on credit normalization trails that of peers like Capital One, whose early tightening in 2022 allowed for better performance. This lag serves as a reminder of management's past missteps, but also highlights the room for further improvement if Ally continues on its current path. Looking at the competitive landscape, peer banks such as Capital One, J.P. Morgan, and Wells Fargo have reported double-digit growth in auto loan originations, which signals a recovery in demand. Ally's ability to remain competitive in this environment bodes well for its loan growth trajectory. However, macro risks such as rising tariffs could complicate the outlook. As Capital One's CEO noted, higher vehicle prices from continued trade tensions could have mixed effects: while they would improve borrower equity and recovery rates on existing loans, they could dampen demand for new auto loans, requiring thoughtful adjustments in strategy. This cyclical dynamic underscores the difficulty of managing a lending business through changing economic conditions, especially when past underwriting decisions carry lingering effects. Overall, Ally's outlook is materially better than it was even a year ago. CEO Michael Rhodes has emphasized the importance of focus and resource allocation to areas where Ally has real scale and deep customer relationships. His commitment to prioritizing Dealer Financial Services, Corporate Finance, and Deposits aligns with the business's core strengths and sets the foundation for organic growth. With signs of stabilization in credit, disciplined deposit management, and operating improvements taking root, Ally is positioned to generate stronger results going forward. While not without risks, particularly in terms of competition and macro sensitivity, the stock appears attractively priced relative to its improved trajectory, presenting a compelling opportunity for long-term investors. Ally Financial Inc. (ALLY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held ALLY at the end of the fourth quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of ALLY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ALLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
22-02-2025
- Business
- Yahoo
Ally Financial Full Year 2024 Earnings: EPS Misses Expectations
Revenue: US$6.75b (down 5.0% from FY 2023). Net income: US$559.0m (down 34% from FY 2023). Profit margin: 8.3% (down from 12% in FY 2023). The decrease in margin was driven by lower revenue. EPS: US$1.82 (down from US$2.80 in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 38%. The primary driver behind last 12 months revenue was the Automotive Finance Operations segment contributing a total revenue of US$4.67b (69% of total revenue). Explore how ALLY's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 12% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Consumer Finance industry in the US. Performance of the American Consumer Finance industry. The company's shares are down 2.3% from a week ago. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Ally Financial, and understanding this should be part of your investment process. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
