Ford Motor Company (F)

Conclusion

Ford Motor Company designs, builds and sells trucks, SUVs, vans, cars and Lincoln luxury vehicles, and runs its own vehicle financing arm. At a price of 12.52 USD on 2026-11-09, the market capitalisation is 49.1 billion USD and the enterprise value is 178.1 billion USD.

The verdict is fair. The fair value band runs from 8.68 to 13.02 USD with a midpoint of 10.85 USD, giving a margin of safety of -13.3% at the current price. The DCF gives 10.23 USD per share, and the fair value from historical multiples is 11.47 USD. Price-to-free-cash-flow is 9.5 against a ten-year median of 4.4, while price-to-sales of 0.26 sits below its median of 0.29 and price-to-book of 1.33 sits above its median of 1.22. The reverse DCF implies growth of 5.52% a year, while revenue grew at a five-year CAGR of 8.05% and free cash flow per share fell at a five-year CAGR of -7.65%.

What holds the case up is a Beneish M-score of -2.95, a share count CAGR over five years of 0.03%, and a dividend yield of 4.89%. What would break it is interest coverage of -5.43, an Altman Z-score of 0.82 in the distress zone, and a ROIC of -3.75% against a WACC of 6.3%.

Financial health

Financial health is red, with three bad readings and one neutral. Interest coverage is -5.43 on a trailing basis, so operating results do not cover interest, and net debt to EBITDA is assessed as bad, although no figure is available because EBITDA is negative. The current ratio of 1.08 and quick ratio of 0.89 are close to 1, while debt to equity stands at 4.42. The Altman Z-score is 0.82, in the distress zone; Ford is a manufacturer, the business the model was designed for. Insolvency risk: low, about 2.8% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is yellow: three readings are good and one is bad. Free cash flow conversion over five years is 196.9%, while the trailing figure is not available. The accrual ratio is -10.3%, and stock-based compensation is 0.2% of revenue, leaving free cash flow after it at 4.72 billion USD. The five-year share count CAGR is 0.03%, so buybacks are offsetting little. The Piotroski score is 3 out of 9, the weak point. The Beneish M-score of -2.95 is in the unlikely range. Ford beat earnings estimates in 7 of the last 8 quarters, with an average surprise of 116.0%. Current-year estimates rose 2.0% over 90 days, but next year's estimate fell 0.87%, with 8 downward revisions against 2 upward in the last 30 days.

Profitability

Profitability is red, with one good reading and three bad ones. Gross margin is 12.4% against a ten-year median of 14.4%, operating margin is 1.9% against 2.6%, and net margin is -4.2% against 2.4%. ROIC is -3.75% against a WACC of 6.3%, a ROIC minus WACC of -10.1%, which means the business is destroying value. The five-year ROIC median is 2.8%. Return on equity is -21.1%. The DuPont split at 2025-12-31 shows an equity multiplier of 8.04, asset turnover of 0.65 and a net margin of -4.37%, so leverage magnifies the weak returns rather than creating them.

Growth

Growth is yellow: revenue growth and its consistency are good, while the next-year EPS estimate is bad. Revenue compounded at 5.8% over three years, 8.1% over five and 2.3% over ten. Revenue grew in 8 of 10 comparable years. Free cash flow per share fell at a five-year CAGR of -7.7%, but rose at 3.4% over ten years. The EPS CAGR is not available. Analysts' next-year EPS estimate implies a change of -0.9%.

Valuation

Valuation is yellow, a neutral reading. Price-to-free-cash-flow is 9.5 against a ten-year median of 4.4, a premium of 115.9%. Price-to-sales is at a discount of 10.6%, and price-to-book at a premium of 9.1%. Earnings are negative, so the earnings yield of -15.9% and the P/E are not meaningful. The DCF uses a discount rate of 14.42%, and the terminal value makes up 33.1% of it. The reverse DCF implied growth of 5.52% is given against revenue growth with a difference of -2.5% and against free cash flow per share with a difference of 13.2%. The dividend yield is 4.89% and the payout on free cash flow is 46.7%. The fair value is built on fixed assumptions, including a 5% equity risk premium and capped growth, and is not a price target.

Risks

Interest coverage of -5.43 means operating results do not cover interest, so refinancing or a further downturn would press cash flow. The Altman Z-score of 0.82 and debt to equity of 4.42 leave little buffer. ROIC below WACC means new capital is not earning its cost. Negative earnings make multiples unreliable. The trailing free cash flow conversion, net debt to EBITDA, the EPS CAGR and the current EV/EBITDA are not available. This analysis has limits: it has no debt maturity schedule and no revenue by segment, the 21% tax rate is an assumption, and the fair value band is an order of magnitude, not a price target.