Goodyear has gotten torched over the last six months - since December 2025, its stock price has dropped 31.5% to $6.17 per share. This might have investors contemplating their next move.
Is now the time to buy Goodyear, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Do We Think Goodyear Will Underperform?
Even though the stock has become cheaper, we’re swiping left on Goodyear for now. Here are three reasons we avoid GT, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Goodyear’s sales grew at a mediocre 7% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector.
2. EPS Took a Dip Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Sadly for Goodyear, its EPS declined by more than its revenue over the last two years, dropping 56.8%. This tells us the company struggled to adjust to shrinking demand.
3. Cash Burn Ignites Concerns
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Goodyear’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 1.5%, meaning it lit $1.48 of cash on fire for every $100 in revenue.
Final Judgment
Goodyear doesn’t pass our quality test. After the recent drawdown, the stock trades at $6.17 per share (or a forward price-to-sales ratio of 0.1×). The market typically values companies like Goodyear based on their anticipated profits for the next 12 months, but there aren’t enough published estimates to arrive at a reliable number. You should avoid this stock for now - better opportunities lie elsewhere. We’d suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
Stocks We Would Buy Instead of Goodyear
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