F

Ford is a textbook cheap-but-troubled cyclical. At $13.36 the whole company trades for 0.3x its $187B of revenue and roughly 2.5x its $21.3B of operating cash flow — a valuation that already prices in a lot of pain. The problem is that FY2025 justified some of that pessimism: revenue barely grew (+1.2%) while the company swung from $5.89B of net income in 2024 to a $8.16B loss, with operating income of -$9.17B, EPS of -$2.06, and ROE of -22.7%. Stockholders' equity fell 19.8% to $36.0B and retained earnings dropped a third to $22.5B, so the loss is real and it ate into the balance sheet.

The saving grace is the quality-of-earnings gap. Operating cash flow rose 38% to $21.3B even as GAAP earnings collapsed, and depreciation & amortization more than doubled (+111%) to $16.0B — much of that is Ford Credit operating-lease depreciation, not core-auto cash burn. The 10-K leans heavily on non-GAAP 'Company Adjusted EBIT' and flags pension/OPEB remeasurement and restructuring 'special items' (facility and personnel charges to 'match production capacity and cost structure to market demand'), which suggests a chunk of the headline loss is non-cash or one-time rather than a fully operating result. That is why this is a hold and not a sell: the cash engine still runs and the stock is genuinely cheap.