Ford (F +0.29%) investors just turned the corner on a great year. Despite macro uncertainty around tariffs and shifting trade policies, shares produced a phenomenal total return of 42% in 2025. This crushed the S&P 500's returns.
The auto stock is still trading below $15. Does this setup make Ford a buy right now?
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Positive developments put Ford in the fast lane
In 2025, Ford's F-Series was once again the best-selling truck line-up in America, with unit volume reaching 829,000. This was the 44th straight year the business held this position, showcasing the popularity of these cars. Ford is clearly a dominant force in this part of the overall auto industry.
What's more, the company's pro division is finding notable success. This includes sales of vehicles, software, and services to commercial customers. Margins and growth are higher than the overall business. And it brings in a recurring revenue stream, which is not typical in the auto industry.
The Federal Reserve's decision to start cutting interest rates could be another positive development. Cars are huge purchases. And if financing costs can be decreased, it could support greater demand for Ford.
NYSE: F
Key Data Points
Investors must take a closer look beneath the hood
Ford might have trounced the market in 2025, but over the past 10 years, though, the Detroit car manufacturer's shares have produced a total return of just 96% (as of Jan. 9). That's a disappointing showing when you learn that the S&P 500's total return during the same time was 331%.
I believe this long-term trend is indicative of what the future will bring. Any stock can outperform the benchmark over a short time period. However, Ford doesn't possess traits that would make any rational investor think it's a high-quality company.
Growth is almost nonexistent. Revenue will decrease 0.5% in 2026 and increase 1.1% in 2027, according to the consensus view among sell-side analysts. Profit margins are also razor-thin. These two factors aren't entirely Ford's fault. The industry is very mature. There are immense costs, with huge capital expenditures. And it doesn't help that there's a lot of competition.
Consumers are sensitive to broader macro trends. Recessions do happen, and in economic downturns, Ford could see its sales decline. At this point, profitability will also be under pressure. Owning a company that can unpredictably be operating in the red is not easy to stomach.
With shares under $15, Ford stock trades at a forward price-to-earnings ratio of 10. Value investors might assemble around this business. However, it's not easy to be optimistic about buying and holding shares with a five- or 10-year time horizon.
