Ally Financial Inc. (ALLY) Stock Analysis

Analysis from 10-Q filed 2025-10-30. Data as of Q3 2025.

Overall Grade: F (Concerning)

Ally Financial Inc. faces challenges in financial performance that warrant careful analysis.

Metric	Value	Context
ROIC	N/A	Below expectations
FCF Margin	51.7%	Strong cash generation
Debt/Equity	1.4x	Moderate leverage

Investment Thesis: Healthy free cash flow margin of 51.7% provides financial flexibility for growth and shareholder returns.

Explore Ally Financial Inc.: Earnings History | Filing Intelligence | ROIC Analysis

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Profitability: Ally Financial Inc. earns N/A ROIC

Ally Financial Inc.'s trailing-twelve-month ROIC of N/A (sector median: 9.2%). Source: 10-Q filed 2025-10-30.

Metric	ALLY	Rating	Context
Return on Invested Capital (ROIC)	N/A	Red flag	Below sector median of 9.2%
Return on Equity (ROE)	3.6%	Warning	Moderate equity returns

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Cash Flow: Ally Financial Inc. generates $4.0B FCF at 51.7% margin, positive NaN/8 quarters

Ally Financial Inc. generated $4.0B in free cash flow (TTM), a 51.7% FCF margin, a margin that ranks Top 10% in Financials. Operating cash flow exceeds net income by 7.7x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-30.

Metric	ALLY	Rating	Context
Free Cash Flow Margin	51.7%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$4.0B	Good	Positive cash generation
OCF/Net Income	7.7x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: Ally Financial Inc. at 1.4x leverage

Ally Financial Inc.'s debt-to-equity ratio of 1.4x reflects elevated leverage. Total debt of $20.6B offset by $11.6B in cash. Source: 10-Q filed 2025-10-30.

Metric	ALLY	Rating	Context
Debt to Equity	1.4x	Adequate	Moderate leverage
Net Cash Position	$-9.0B	Warning	Net debt position

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Valuation: Ally Financial Inc. trades at 23.3x earnings

Ally Financial Inc. trades at a P/E of 23.3x. Free cash flow yield of 33.3% offers attractive cash returns relative to price.

Metric	ALLY	Rating	Context
P/E Ratio	23.3x	Adequate	Premium valuation
EV/Sales	2.6x	Good	Attractive revenue multiple
FCF Yield	33.3%	Excellent	Attractive cash return
Dividend Yield	3.1%	Adequate	Meaningful income

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Capital Allocation: Ally Financial Inc. returns 3.4% shareholder yield

Ally Financial Inc.'s total shareholder yield is 3.4% (dividends 3.1% + buybacks 0.4%). Source: 10-Q filed 2025-10-30.

Metric	ALLY	Rating	Context
Total Shareholder Yield	3.4%	Good	Dividend + buyback yield combined
Buyback Yield	0.4%	Adequate	Minimal buyback activity
Total Capital Returned (TTM)	$423.0M	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Free Cash Flow Margin	51.7%	Top 10%	2.4x above
Return on Equity (ROE)	3.6%	Bottom 25%	0.3x below
P/E Ratio	23.3x	N/A	-

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Financial Scorecard

Metric	ALLY	Rating	Sector Context
Free Cash Flow Margin	51.7%	Excellent	Top 10% of sector (median: 21.1%)
Debt to Equity Ratio	136.5%	Adequate	Elevated but manageable
P/E Ratio (Price-to-Earnings)	23.3x	Adequate	Fair value
Free Cash Flow Yield	33.3%	Excellent	High cash return

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Frequently Asked Questions

Q: What is Ally Financial Inc.'s Return on Invested Capital (ROIC)?

Ally Financial Inc. (ALLY) has a trailing twelve-month Return on Invested Capital (ROIC) of N/A. This compares below the sector median of 9.2%. An ROIC below 8% suggests the company may be destroying shareholder value.

Q: What is Ally Financial Inc.'s Free Cash Flow Margin?

Ally Financial Inc. (ALLY) has a free cash flow margin of 51.7%, generating $4.0 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.

Q: Is Ally Financial Inc. stock overvalued or undervalued?

Ally Financial Inc. (ALLY) trades at a P/E ratio of 23.3x, which is above the sector median of N/A. The EV/Sales multiple is 2.6x. Free cash flow yield is 33.3%, which represents an attractive cash return to investors.

Q: Does Ally Financial Inc. pay a dividend?

Ally Financial Inc. (ALLY) currently pays a dividend yield of 3.1%. Including share buybacks, the total shareholder yield is 3.4%. This yield is moderate, suggesting a balance between income and growth reinvestment.

Q: How much debt does Ally Financial Inc. have?

Ally Financial Inc. (ALLY) has a debt-to-equity ratio of 1.4x with total debt of $20.6 billion. Net debt position is $9.0 billion.

Q: What is Ally Financial Inc.'s revenue and earnings growth?

Ally Financial Inc. (ALLY) declined revenue by 5.2% year-over-year. Earnings per share increased by 0.6% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.

Q: How does Ally Financial Inc. compare to competitors in Financials?

Compared to other companies in Financials, Ally Financial Inc. (ALLY) shows: ROIC of N/A is below the sector median of 9.2% (NaNx median). FCF margin of 51.7% exceeds the sector median of 21.1% (Top 9% of sector). These rankings are based on MetricDuck's analysis of all Financials companies with available SEC filings.

Q: What warning signs should I watch for with Ally Financial Inc.?

Ally Financial Inc. (ALLY) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.

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Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q3 2025.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.