Ally Financial: The Rise of Digital Banking
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy ALLY?
Source: Fool
- Sustained Customer Growth: As of December 31, Ally Financial reported 3.5 million deposit customers, marking the 17th consecutive year of growth, which underscores its solid position and customer loyalty in the highly competitive financial services industry.
- Strong Deposit Base: Ally ended Q4 with $144 billion in retail deposits, providing a low-cost funding source for its auto loan business, further solidifying its market leadership.
- Significant Profitability Improvement: In 2025, Ally's adjusted earnings per share surged by 62%, primarily driven by higher yields on retail auto loans and lower yields on deposits, with net interest margin expanding from 3.27% in 2024 to 3.43% last year.
- Optimistic Market Outlook: Wall Street analysts forecast Ally's earnings per share to grow at a compound annual rate of 23.5% from 2025 to 2028, and despite risks in the automotive sector, its strong demand and risk management capabilities present a positive outlook.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ALLY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 42.130
Low
48.00
Averages
53.71
High
70.00
Current: 42.130
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.
Dave Wright Wins 2026 TIME Dealer of the Year Award
- Top Industry Honor: Dave Wright was named the 2026 TIME Dealer of the Year, highlighting his exceptional leadership in the automotive sector and long-standing commitment to community service, showcasing his outstanding performance among over 20,000 dealers nationwide.
- Community Contributions: Wright donates over $50,000 annually to various organizations supporting children, educators, and seniors, reflecting his deep sense of responsibility and impact on the community, which enhances his dealership's reputation.
- Sponsor Support: Ally Financial, as the exclusive sponsor of the award for 15 consecutive years, has committed to donating $10,000 to a charity of Wright's choice, demonstrating its ongoing investment in the automotive industry and community.
- Transparent Selection Process: The TIME Dealer of the Year award is selected by a panel from the Tauber Institute for Global Operations at the University of Michigan, ensuring the fairness and authority of the selection process, which further enhances the award's industry influence.
See More
Dave Wright Wins 2026 TIME Dealer of the Year Award
- Industry Honor: Dave Wright was named the 2026 TIME Dealer of the Year at the 109th National Automotive Dealers Association Show, highlighting his exceptional achievements and community service, standing out among over 20,000 dealers nationwide.
- Community Contributions: Wright supports various community initiatives, including Goodwill and local youth clubs, with annual contributions exceeding $50,000, demonstrating his deep commitment to social responsibility and community impact.
- Sponsor Support: As the exclusive sponsor of the TIME Dealer of the Year award for 15 years, Ally Financial has donated nearly $1 million, and this year will provide $10,000 to a charity of Wright's choice, further enhancing community development efforts.
- Industry Influence: Wright's dealership is the only one in Iowa to be recognized as a Best Dealership to Work For 12 times, showcasing his success in improving employee satisfaction and operational efficiency, thereby strengthening his position in the competitive automotive market.
See More
Ally Financial: The Rise of Digital Banking
- Sustained Customer Growth: As of December 31, Ally Financial reported 3.5 million deposit customers, marking the 17th consecutive year of growth, which underscores its solid position and customer loyalty in the highly competitive financial services industry.
- Strong Deposit Base: Ally ended Q4 with $144 billion in retail deposits, providing a low-cost funding source for its auto loan business, further solidifying its market leadership.
- Significant Profitability Improvement: In 2025, Ally's adjusted earnings per share surged by 62%, primarily driven by higher yields on retail auto loans and lower yields on deposits, with net interest margin expanding from 3.27% in 2024 to 3.43% last year.
- Optimistic Market Outlook: Wall Street analysts forecast Ally's earnings per share to grow at a compound annual rate of 23.5% from 2025 to 2028, and despite risks in the automotive sector, its strong demand and risk management capabilities present a positive outlook.
See More
Buffett's Legacy Continues as Abel Takes Over Berkshire Hathaway
- Portfolio Overview: Berkshire Hathaway's stock portfolio is valued at $267 billion, with approximately one-quarter in financial stocks, representing 40% of the total value, highlighting the company's strong positioning in the financial sector.
- Ally Financial's Strategic Shift: Ally Financial exited the mortgage origination business last year to focus on auto loans, which improved its credit quality and net interest margin; analysts project a target price of $52.50, indicating a potential 24% return by 2026 as interest rates decline.
- Jefferies Financial's Market Opportunities: As a pure-play investment bank, Jefferies Financial benefits from the active M&A market, with investment banking revenue rising 12% last year; despite a 19% stock price drop due to losses related to First Brands' bankruptcy, analysts remain bullish with a target price of $77, suggesting a 26% upside.
- Buffett's Investment Recommendations: Ally Financial and Jefferies Financial are highlighted as Buffett's quality financial stocks, making them key targets for investors in February to capitalize on the recovery opportunities in the market.
See More
Five MarketRank™ Stocks Endorsed by Analysts and Major Institutions
Market Trends: Investors are shifting focus from speculative growth to fundamental values, emphasizing quality and durability in their investments, particularly in the context of a choppy market environment.
Ally Financial Performance: Ally Financial has evolved into a leading digital banking corporation, reporting strong earnings and a significant market capitalization, while maintaining a low overhead structure that enhances competitiveness.
Delta Airlines Strategy: Delta Airlines has redefined its brand by focusing on premium service offerings and diversifying revenue streams, positioning itself as a key player in the airline industry despite some recent lagging performance.
Marvell Technology's Role: Marvell Technology is addressing the challenges of data movement in AI infrastructure, specializing in high-speed networking and custom silicon solutions, while maintaining a strong market position despite recent stock performance fluctuations.
See More
Berkshire Hathaway's Performance Under Buffett's Legacy
- Digital Banking Surge: Nu Holdings has rapidly expanded in Brazil, Mexico, and Colombia, becoming the largest financial institution in Brazil with 61% of the adult population as customers, showcasing its strong appeal and growth potential in the Latin American market.
- Market Expansion Plans: Nu is set to open new offices in the U.S., including Miami, Palo Alto, and Washington, D.C., indicating its strategic focus on international markets and future growth, which is expected to further drive user acquisition.
- Investment Return Comparison: Although Berkshire Hathaway completely exited Nu Holdings by the end of 2024, the company's performance in 2025 has outpaced other top Berkshire stocks, highlighting potential missteps in investment decisions and Nu's robust market performance.
- Sustained Growth Expectations: Nu continues to rapidly add new customers in the Brazilian market, with expectations for higher growth in the coming years, reflecting its competitive advantages and market opportunities in the digital banking sector.
See More
Dave Wright Wins 2026 TIME Dealer of the Year Award
- Top Industry Honor: Dave Wright was named the 2026 TIME Dealer of the Year, highlighting his exceptional leadership in the automotive sector and long-standing commitment to community service, showcasing his outstanding performance among over 20,000 dealers nationwide.
- Community Contributions: Wright donates over $50,000 annually to various organizations supporting children, educators, and seniors, reflecting his deep sense of responsibility and impact on the community, which enhances his dealership's reputation.
- Sponsor Support: Ally Financial, as the exclusive sponsor of the award for 15 consecutive years, has committed to donating $10,000 to a charity of Wright's choice, demonstrating its ongoing investment in the automotive industry and community.
- Transparent Selection Process: The TIME Dealer of the Year award is selected by a panel from the Tauber Institute for Global Operations at the University of Michigan, ensuring the fairness and authority of the selection process, which further enhances the award's industry influence.
See More
Dave Wright Wins 2026 TIME Dealer of the Year Award
- Industry Honor: Dave Wright was named the 2026 TIME Dealer of the Year at the 109th National Automotive Dealers Association Show, highlighting his exceptional achievements and community service, standing out among over 20,000 dealers nationwide.
- Community Contributions: Wright supports various community initiatives, including Goodwill and local youth clubs, with annual contributions exceeding $50,000, demonstrating his deep commitment to social responsibility and community impact.
- Sponsor Support: As the exclusive sponsor of the TIME Dealer of the Year award for 15 years, Ally Financial has donated nearly $1 million, and this year will provide $10,000 to a charity of Wright's choice, further enhancing community development efforts.
- Industry Influence: Wright's dealership is the only one in Iowa to be recognized as a Best Dealership to Work For 12 times, showcasing his success in improving employee satisfaction and operational efficiency, thereby strengthening his position in the competitive automotive market.
See More
Ally Financial: The Rise of Digital Banking
- Sustained Customer Growth: As of December 31, Ally Financial reported 3.5 million deposit customers, marking the 17th consecutive year of growth, which underscores its solid position and customer loyalty in the highly competitive financial services industry.
- Strong Deposit Base: Ally ended Q4 with $144 billion in retail deposits, providing a low-cost funding source for its auto loan business, further solidifying its market leadership.
- Significant Profitability Improvement: In 2025, Ally's adjusted earnings per share surged by 62%, primarily driven by higher yields on retail auto loans and lower yields on deposits, with net interest margin expanding from 3.27% in 2024 to 3.43% last year.
- Optimistic Market Outlook: Wall Street analysts forecast Ally's earnings per share to grow at a compound annual rate of 23.5% from 2025 to 2028, and despite risks in the automotive sector, its strong demand and risk management capabilities present a positive outlook.
See More
Buffett's Legacy Continues as Abel Takes Over Berkshire Hathaway
- Portfolio Overview: Berkshire Hathaway's stock portfolio is valued at $267 billion, with approximately one-quarter in financial stocks, representing 40% of the total value, highlighting the company's strong positioning in the financial sector.
- Ally Financial's Strategic Shift: Ally Financial exited the mortgage origination business last year to focus on auto loans, which improved its credit quality and net interest margin; analysts project a target price of $52.50, indicating a potential 24% return by 2026 as interest rates decline.
- Jefferies Financial's Market Opportunities: As a pure-play investment bank, Jefferies Financial benefits from the active M&A market, with investment banking revenue rising 12% last year; despite a 19% stock price drop due to losses related to First Brands' bankruptcy, analysts remain bullish with a target price of $77, suggesting a 26% upside.
- Buffett's Investment Recommendations: Ally Financial and Jefferies Financial are highlighted as Buffett's quality financial stocks, making them key targets for investors in February to capitalize on the recovery opportunities in the market.
See More
Five MarketRank™ Stocks Endorsed by Analysts and Major Institutions
Market Trends: Investors are shifting focus from speculative growth to fundamental values, emphasizing quality and durability in their investments, particularly in the context of a choppy market environment.
Ally Financial Performance: Ally Financial has evolved into a leading digital banking corporation, reporting strong earnings and a significant market capitalization, while maintaining a low overhead structure that enhances competitiveness.
Delta Airlines Strategy: Delta Airlines has redefined its brand by focusing on premium service offerings and diversifying revenue streams, positioning itself as a key player in the airline industry despite some recent lagging performance.
Marvell Technology's Role: Marvell Technology is addressing the challenges of data movement in AI infrastructure, specializing in high-speed networking and custom silicon solutions, while maintaining a strong market position despite recent stock performance fluctuations.
See More
Berkshire Hathaway's Performance Under Buffett's Legacy
- Digital Banking Surge: Nu Holdings has rapidly expanded in Brazil, Mexico, and Colombia, becoming the largest financial institution in Brazil with 61% of the adult population as customers, showcasing its strong appeal and growth potential in the Latin American market.
- Market Expansion Plans: Nu is set to open new offices in the U.S., including Miami, Palo Alto, and Washington, D.C., indicating its strategic focus on international markets and future growth, which is expected to further drive user acquisition.
- Investment Return Comparison: Although Berkshire Hathaway completely exited Nu Holdings by the end of 2024, the company's performance in 2025 has outpaced other top Berkshire stocks, highlighting potential missteps in investment decisions and Nu's robust market performance.
- Sustained Growth Expectations: Nu continues to rapidly add new customers in the Brazilian market, with expectations for higher growth in the coming years, reflecting its competitive advantages and market opportunities in the digital banking sector.
See More
