Ally Financial (ALLY) Reports Strong Q4 2025 Earnings, Issues 2026 Guidance with Key Metrics
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2026
0mins
Source: seekingalpha
- Earnings Beat: Ally Financial reported an adjusted EPS of $1.09 for Q4 2025, exceeding analyst expectations of $1.02, although it fell from $1.15 in the prior quarter, yet rose significantly from $0.78 in Q4 2024, indicating ongoing improvement in profitability.
- Revenue Growth: The adjusted total net revenue for Q4 reached $2.17 billion, surpassing the expected $2.14 billion, and increased from $2.16 billion in Q3 and $2.09 billion in Q4 2024, reflecting enhanced competitiveness in the market.
- Future Guidance: The company projects a net interest margin of 3.60%-3.70% for 2026, up from 3.47% in 2025, while adjusted other revenue is expected to remain flat to grow by 5%, which will support sustainable growth moving forward.
- Buyback Program: Ally Financial's board has authorized a $2 billion open-ended share buyback program aimed at enhancing EPS through reduced share count, thereby boosting investor confidence and supporting stock performance.
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Analyst Views on ALLY
Wall Street analysts forecast ALLY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ALLY is 53.71 USD with a low forecast of 48.00 USD and a high forecast of 70.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
12 Buy
3 Hold
0 Sell
Strong Buy
Current: 42.300
Low
48.00
Averages
53.71
High
70.00
Current: 42.300
Low
48.00
Averages
53.71
High
70.00
About ALLY
Ally Financial Inc. is a financial services company. The Company’s segments include Automotive Finance operations, Insurance operations, and Corporate Finance operations. The Automotive Finance operations segment is engaged in providing automotive financing services to consumers, automotive dealers and retailers, companies, and municipalities. Its Insurance operations segment operates as a complementary automotive-focused business, offering both consumer finance protection and insurance products sold primarily through the automotive dealer channel, and commercial insurance products sold directly to dealers. Its Corporate Finance operations segment provides senior secured asset-based and leveraged cash flow loans to U.S.-based middle-market companies, with a focus on businesses owned by private equity sponsors. The Company also includes a robust corporate finance business that offers capital for equity sponsors and middle-market companies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities in Financial Stocks Amid Market Highs
- Ally Financial's Strong Performance: In 2025, Ally Financial recorded its highest-ever consumer auto loan applications, originating $43.7 billion in loans and achieving record insurance premiums, showcasing its robust performance in auto lending and consumer banking.
- Undervalued Market Position: Despite Ally Financial's net interest margin of 3.43%, significantly above the 2%-3% range of most banks, it trades at just eight times forward earnings and below book value, indicating it is undervalued by the market.
- Capital One's Future Potential: Although Capital One is down about 12% year-to-date, its credit card, auto, and commercial loans all increased in the fourth quarter, with a strong net interest margin of 8.26%, suggesting solid profitability and potential long-term gains from its acquisition of fintech company Brex.
- Market Environment Impact: Amidst a market nearing all-time highs, Capital One's valuation at approximately 10.6 times forward earnings presents a buying opportunity for investors, especially if the proposed credit card interest rate cap does not materialize.
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Investment Opportunities in Ally Financial and Capital One
- Market Position of Ally: Ally Financial is the largest auto lender in the U.S. not owned by an automaker, with $43.7 billion in loans originated in 2025, indicating strong performance in the auto loan market and potential for further growth as interest rates decline.
- Profitability Analysis: Despite Ally's net interest margin of 3.43%, which exceeds the 2%-3% range of most banks, its price-to-earnings ratio stands at only eight times forward earnings, suggesting the stock is undervalued and may attract long-term investors.
- Challenges and Opportunities for Capital One: Capital One's stock has dropped about 12% at the start of 2026, primarily due to concerns over a proposed credit card interest rate cap, yet its fourth-quarter growth in credit card, auto, and commercial loans demonstrates business resilience.
- Impact of Acquisition Plans: Although Capital One's plan to acquire fintech company Brex for $5.15 billion has raised market skepticism, its net interest margin of 8.26% significantly outperforms industry averages, indicating competitive strength and future growth potential.
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