Download PDF

1. Company Snapshot

1.a. Company Description

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services to consumer, commercial, and corporate customers primarily in the United States and Canada.It operates through four segments: Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations.The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing.


It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services.The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers.This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers' vehicle inventory.


The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings.The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies; leveraged loans; and commercial real estate product to serve companies in the healthcare industry.The company also offers commercial banking products and services.


In addition, it provides securities brokerage and investment advisory services.The company was formerly known as GMAC Inc.and changed its name to Ally Financial Inc.


in May 2010.Ally Financial Inc.was founded in 1919 and is based in Detroit, Michigan.

Show Full description

1.b. Last Insights on ALLY

Ally Financial's recent performance has been driven by robust Q2 and Q3 earnings growth, with EPS growth projected to be robust through 2027. The company's Q2 results beat expectations due to cost controls and lower credit losses. A strong net interest margin of 3.45% and solid CET1 levels support potential buybacks. The company is streamlining operations, focusing on auto finance, insurance, and corporate lending. A quarterly dividend of $0.30 per share of common stock was declared, and a $15.9 million dividend payment on Series B preferred stock.

1.c. Company Highlights

2. Ally Financial's Q3 2025 Earnings: A Strong Performance

Ally Financial reported a robust third quarter in 2025, with adjusted EPS surging 166% to $1.15 per share, beating estimates of $0.99. The company's core ROTCE stood at 15%, while net interest margin expanded to 3.55%, up 10 basis points quarter-over-quarter. The strong financial performance was driven by a 9% year-over-year growth in net revenue, excluding the sale of the credit card business. The company's CET1 ratio was 10.1%, representing $4.5 billion of excess capital above the regulatory minimum.

Publication Date: Oct -20

📋 Highlights
  • Adjusted EPS Surge:: Increased 166% to $1.15/share, driven by core ROTCE of 15% and expanded net interest margin (3.55%, +10 bps QoQ).
  • Capital Strength:: CET1 ratio at 10.1%, reflecting $4.5 billion excess capital above regulatory minimums.
  • Auto Finance Growth:: $11.7 billion in consumer originations (4 million apps, record volume), with 42% in highest credit tiers and a 9.7% yield.
  • Deposit Expansion:: Digital bank balances reached $142 billion, serving 3.4 million customers, with deposits comprising 90% of total funding.
  • Cost Efficiency & Credit Metrics:: Provision expense down 36% YoY, retail auto NCO rate fell 36 bps to 1.88%, and NIM guidance narrowed to 3.45–3.5% for Q4.

Auto Finance Business Growth

The auto finance business saw significant growth, with consumer originations of $11.7 billion driven by 4 million applications, the highest application volume ever. The originated yield came in at 9.7%, with 42% of originations in the highest credit quality tier. The digital bank ended the quarter with $142 billion in balances, serving 3.4 million customers, with deposits representing nearly 90% of total funding.

Credit Performance and Outlook

The company delivered a significant year-over-year earnings growth, with provision expense decreasing by 36% year-over-year, and retail auto NCO rate declining 36 points year-over-year to 1.88%. The consolidated net charge-off rate was 118 basis points, a decline of 32 basis points from the prior year. The company expects full-year net charge-offs (NCOs) of approximately 2%, at the low end of their 2% to 2.25% guide.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 0.86, and a Dividend Yield of 2.97%, Ally Financial's stock appears to be reasonably valued. The company's Net Interest Margin (NIM) is expected to migrate to the upper threes over time. As CEO Michael Rhodes noted, "we feel good about our ability to compete in the market and get great originations in terms of credit and risk yield," indicating a positive outlook for the company's future performance.

Business Strategy and Growth Prospects

The company has made progress in streamlining its business by exiting the card and mortgage businesses, focusing on its core strengths in auto and commercial and corporate finance. Ally Financial plans to continue growing in areas with attractive risk-adjusted returns, leveraging its relevant scale in fragmented markets. The company anticipates sustained improvement driven by the execution of its 10,000 colleagues and remains confident in its ability to deliver on its medium-term targets.

3. NewsRoom

Card image cap

Arrowstreet Capital Limited Partnership Has $210.35 Million Position in Ally Financial Inc. $ALLY

Dec -03

Source: defenseworld.net

Card image cap

Ally Financial: Credit Improvement Defies Auto Loan Fears (Upgrade)

Nov -21

Source: seekingalpha.com

Card image cap

Ally Financial to present at the Goldman Sachs US Financial Services Conference

Nov -20

Source: prnewswire.com

Card image cap

Ally Financial Inc. (ALLY) Presents at The BancAnalysts Association of Boston Conference Transcript

Nov -07

Source: seekingalpha.com

Card image cap

Ally Financial announces board of director appointments

Oct -30

Source: prnewswire.com

Card image cap

DekaBank Deutsche Girozentrale Has $2.64 Million Stock Holdings in Ally Financial Inc. $ALLY

Oct -26

Source: defenseworld.net

Card image cap

2 Top Buffett Stocks to Buy and Hold for the Long Haul

Oct -24

Source: fool.com

Card image cap

Ally Financial to present at the BancAnalysts Association of Boston Conference

Oct -23

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.62%)

6. Segments

Automotive Finance

Expected Growth: 6.5%

Ally Financial Inc.'s 6.5% growth in Automotive Finance is driven by increasing demand for vehicle financing, strategic partnerships with dealerships, and a strong online presence. Additionally, the company's diversified product offerings, including leasing and insurance services, contribute to its growth. Furthermore, Ally's digital platform and mobile app provide a seamless customer experience, attracting more customers and driving business expansion.

Insurance

Expected Growth: 6.8%

Ally Financial Inc.'s 6.8% insurance growth is driven by increasing demand for digital insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on customer experience, competitive pricing, and a wide range of insurance offerings have contributed to its growth.

Corporate Finance

Expected Growth: 7.2%

Ally Financial Inc.'s 7.2% growth in Corporate Finance is driven by increasing demand for auto financing, strategic partnerships, and expansion into new markets. Additionally, the company's digital transformation efforts, cost savings initiatives, and strong risk management practices have contributed to its growth.

Corporate and Other

Expected Growth: 6.2%

Ally Financial Inc.'s Corporate and Other segment growth of 6.2% is driven by increasing investment income, growth in Ally Invest brokerage accounts, and expansion of its digital offerings. Additionally, the company's cost savings initiatives and improved operational efficiency also contributed to the segment's growth.

Mortgage Finance

Expected Growth: 7.5%

Ally Financial Inc.'s 7.5% growth in Mortgage Finance is driven by increasing demand for home purchases and refinancing, low interest rates, and government-backed loan programs. Additionally, Ally's digital platform and expanded broker network have improved customer access and experience, contributing to the segment's growth.

7. Detailed Products

Auto Finance

Ally Financial Inc. provides financing for new and used vehicles, including cars, trucks, and SUVs, through its network of dealerships and online platforms.

Home Loans

Ally Financial Inc. offers a range of home loan products, including mortgages, refinancing, and home equity loans, to help customers achieve their homeownership goals.

Online Banking

Ally Financial Inc. provides online banking services, including checking and savings accounts, CDs, and IRAs, with competitive rates and no monthly maintenance fees.

Investment and Brokerage Services

Ally Financial Inc. offers investment and brokerage services, including self-directed trading, investment advice, and retirement accounts, through its Ally Invest platform.

Corporate Finance

Ally Financial Inc. provides corporate finance services, including capital markets, treasury services, and asset-based lending, to businesses and corporations.

8. Ally Financial Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ally Financial Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Ally Financial Inc. has a large customer base, but customers have significant bargaining power due to the availability of alternative financial services providers.

Bargaining Power Of Suppliers

Ally Financial Inc. has a diversified supplier base, and suppliers have limited bargaining power due to the company's large scale of operations.

Threat Of New Entrants

The threat of new entrants in the financial services industry is moderate, as there are significant barriers to entry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.51%
Debt Cost 10.85%
Equity Weight 40.49%
Equity Cost 10.85%
WACC 10.85%
Leverage 146.98%

11. Quality Control: Ally Financial Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
OneMain Holdings

A-Score: 6.7/10

Value: 5.4

Growth: 5.4

Quality: 5.2

Yield: 10.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
FirstCash

A-Score: 6.5/10

Value: 4.3

Growth: 7.6

Quality: 8.4

Yield: 2.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
SLM

A-Score: 6.2/10

Value: 7.0

Growth: 5.6

Quality: 6.8

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Western Union

A-Score: 5.8/10

Value: 7.4

Growth: 3.2

Quality: 6.1

Yield: 10.0

Momentum: 0.5

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Ally Financial

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.3

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Nelnet

A-Score: 5.5/10

Value: 3.6

Growth: 5.8

Quality: 4.7

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

42.42$

Current Price

42.42$

Potential

-0.00%

Expected Cash-Flows