We came across a bullish thesis on The Goodyear Tire & Rubber Company (GT) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on GT. The Goodyear Tire & Rubber Company (GT)'s share was trading at $9.79 as of March 7^th. GT’s trailing and forward P/E were 40.79 and 6.61 respectively according to Yahoo Finance.

A giant tire machine pouring filler into a car tire in an industrial factory.

Goodyear Tire & Rubber (GT) is in the midst of a challenging turnaround, with efficiency remaining its biggest issue. In Q4 2024, the company generated nearly $5 billion in revenue but delivered under $500 million in EBITDA and only $72 million in GAAP net income. However, a one-time receivables catch-up and working capital release drove free cash flow above $1 billion, which was immediately applied to long-term debt. While this provided a short-term boost, it appears to be part of GT’s seasonal cash flow cycle rather than a sign of meaningful operational improvement.

Management continues to guide for efficiency gains in 2025, though execution has been underwhelming. Despite this, the business remains stable, avoiding major missteps. The stock has been range-bound, reflecting uncertainty about the turnaround's success, yet secular tailwinds in the tire industry could provide support. While skepticism remains regarding management’s ability to drive long-term value, the company’s financial stability and potential for gradual improvement keep it in play as an investment opportunity.

The Goodyear Tire & Rubber Company (GT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held GT at the end of the fourth quarter which was 26 in the previous quarter. While we acknowledge the risk and potential of GT 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 GT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.