Digital banking company Ally Financial (NYSE: ALLY) missed Wall Street’s revenue expectations in Q4 CY2025 as sales only rose 1.7% year on year to $2.12 billion. Its non-GAAP profit of $1.09 per share was 6.5% above analysts’ consensus estimates.
Is now the time to buy Ally Financial? Find out by accessing our full research report, it’s free.
Ally Financial (ALLY) Q4 CY2025 Highlights:
- Net Interest Margin: 3.5% vs analyst estimates of 3.6% (7.4 basis point miss)
- Revenue: $2.12 billion vs analyst estimates of $2.15 billion (1.7% year-on-year growth, 1.1% miss)
- Efficiency Ratio: 50.8% vs analyst estimates of 56.9% (610 basis point beat)
- Adjusted EPS: $1.09 vs analyst estimates of $1.02 (6.5% beat)
- Tangible Book Value per Share: $40.38 vs analyst estimates of $41.10 (12.4% year-on-year growth, 1.7% miss)
- Market Capitalization: $13.07 billion
Company Overview
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE: ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Ally Financial’s 8.7% annualized revenue growth over the last five years was decent. Its growth was slightly above the average financials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Ally Financial’s recent performance shows its demand has slowed as its annualized revenue growth of 1.5% over the last two years was below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Ally Financial’s revenue grew by 1.7% year on year to $2.12 billion, falling short of Wall Street’s estimates.
Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.
Tangible Book Value Per Share (TBVPS)
The balance sheet drives profitability for financial firms since earnings flow from managing diverse assets and liabilities across multiple business lines. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential across their varied operations.
This explains why tangible book value per share (TBVPS) is a premier metric for the sector. TBVPS provides concrete per-share net worth that investors can trust when evaluating companies with complex, multi-faceted business models. EPS can become murky due to the complexity of multiple revenue streams, acquisition impacts, or accounting flexibility across different financial services, and book value resists financial engineering manipulation.
Ally Financial’s TBVPS grew at a weak 1.1% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 7.2% annually over the last two years from $35.17 to $40.38 per share.
Tangible Book Value Per Share (TBVPS)
Financial firms generate earnings through diverse intermediation activities, making them fundamentally balance sheet-driven enterprises. Investors focus on balance sheet quality and consistent book value compounding when evaluating these multifaceted financial institutions.
This is why we consider tangible book value per share (TBVPS) an important metric for the sector. TBVPS represents the real net worth per share across all business segments, providing a clear measure of shareholder equity regardless of the complexity of operations. On the other hand, EPS is often distorted by the diverse nature of operations, mergers, and various accounting treatments across different business units. Book value provides clearer performance insights.
Ally Financial’s TBVPS grew at a weak 1.1% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 7.2% annually over the last two years from $35.17 to $40.38 per share.
Key Takeaways from Ally Financial’s Q4 Results
It was good to see Ally Financial beat analysts’ EPS expectations this quarter. On the other hand, its efficiency ratio missed and its net interest margin fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $42 immediately after reporting.
So do we think Ally Financial is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
