Is Goodyear Tire & Rubber (GT) Pricing In Too Much Pessimism After Recent Share Pullback

Simply Wall St

Wed, February 11, 2026 at 12:14 PM GMT+9 6 min read

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GT

-13.50%

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If you are wondering whether Goodyear Tire & Rubber at around US$9.10 is a bargain or a value trap, starting with a clear look at what you are paying for makes a big difference.

The stock has had a mixed run, with a 10.3% return over the last year, a 2.0% gain year to date, but recent setbacks including a 1.4% decline over 30 days and an 8.6% drop in the last week.

These moves have come as investors continue to reassess the business and its positioning in the tire and rubber industry, with sentiment shifting over time rather than on a single headline event. That context matters because shorter term price swings can make the stock look cheaper or more expensive than the underlying business might justify.

On our simple valuation checklist, Goodyear Tire & Rubber scores 5 out of 6 for being undervalued. This sets up a closer look at traditional valuation methods next, followed by an even more holistic way to think about what the stock might be worth by the end of the article.

Find out why Goodyear Tire & Rubber’s 10.3% return over the last year is lagging behind its peers.

Approach 1: Goodyear Tire & Rubber Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back to a present value. In this case, the model uses a 2 Stage Free Cash Flow to Equity approach for Goodyear Tire & Rubber.

The latest twelve months show free cash flow of $182.8 million outflow, so the model leans heavily on future projections. Analysts have specific forecasts out to 2027, including free cash flow of $223.4 million in 2027, and Simply Wall St extrapolates cash flows further out to 2035 using estimated growth rates. All figures are in $, and the projections are expressed in millions rather than billions.

Based on these projected cash flows, the DCF model arrives at an estimated intrinsic value of about $19.58 per share. Compared with a share price around $9.10, the model implies the stock is 53.5% undervalued based on these assumptions and inputs.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Goodyear Tire & Rubber is undervalued by 53.5%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

GT Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Goodyear Tire & Rubber.

Story Continues  

Approach 2: Goodyear Tire & Rubber Price vs Sales

For companies where earnings can be volatile, the P/S ratio is often a useful cross check because it focuses on what the market is paying for each dollar of revenue rather than profit. The level of a “normal” or “fair” P/S generally reflects what investors expect for future growth and how much risk they see in those revenues.

Goodyear Tire & Rubber currently trades on a P/S of 0.14x. That sits well below the Auto Components industry average P/S of 0.83x and the peer group average of 9.75x. On the surface, that points to a lower valuation per dollar of sales compared with many listed peers.

Simply Wall St also calculates a proprietary “Fair Ratio” of 0.62x for Goodyear Tire & Rubber. This is designed to be more tailored than a simple peer or industry comparison because it blends factors like the company’s earnings growth profile, risk characteristics, profit margins, market value and its specific industry. Comparing the current 0.14x P/S to the 0.62x Fair Ratio suggests the shares are pricing in a lower multiple than this framework implies.

Result: UNDERVALUED

NasdaqGS:GT P/S Ratio as at Feb 2026

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies.

Upgrade Your Decision Making: Choose your Goodyear Tire & Rubber Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives, which are simple stories you create about Goodyear Tire & Rubber by linking your view of its future revenue, earnings and margins to a fair value estimate, then comparing that to today’s price.

On Simply Wall St’s Community page, investors use Narratives to connect a company’s business story to a specific forecast and fair value, so you can quickly see whether your view suggests the shares look expensive or cheap at the current price and whether that gap is large enough for you to consider buying or selling.

Because Narratives update automatically when new earnings, news or valuation inputs arrive, you are not locked into a static model. You can see how the consensus fair value for Goodyear shifts, for example from about US$7.30 at the cautious end of analyst views up to around US$14.63 at the optimistic end. You can then decide which version of the story feels closer to your own expectations before you act.

For Goodyear Tire & Rubber, however, we’ll make it really easy for you with previews of two leading Goodyear Tire & Rubber Narratives:

🐂 Goodyear Tire & Rubber Bull Case

Fair value: US$9.89

Gap to this fair value: about 8.0% undervalued versus the last close of US$9.10

Revenue growth in the narrative: 17.2%

Analysts in this narrative tie their fair value to expectations that focusing on premium tires, modernized operations and ongoing product development can support margins, even with only modest profit levels.

They factor in balance sheet repair through asset sales and deleveraging, with the aim of reducing financial risk and giving Goodyear more room to reinvest in the core business.

Key risks center on competition from low cost imports, volatile trade conditions, restructuring costs and weaker commercial demand, which could all weigh on volumes, margins and free cash flow.

🐻 Goodyear Tire & Rubber Bear Case

Fair value: US$7.30

Gap to this fair value: about 24.7% overvalued versus the last close of US$9.10

Revenue growth in the narrative: 38.4% decline

This narrative assumes that pressure from low cost tire imports, trade disruptions and soft demand keeps a lid on volume recovery and leaves Goodyear struggling to lift earnings in a meaningful way.

High debt, tariff related input costs and ongoing restructuring are treated as constraints that limit flexibility to invest in future products or fully defend market share.

The bearish fair value of US$9.00 in the underlying analyst work is connected to lower assumed revenue, thinner margins and a lower future P/E multiple, with the view that the stock offers only a small upside to that level.

Both narratives are built from the same set of public data, yet they arrive at very different conclusions. The real question for you is which story feels closer to how you see Goodyear Tire & Rubber’s earnings power, risks and fair value over the next few years.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for Goodyear Tire & Rubber? Head over to our Community to see what others are saying!

NasdaqGS:GT 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include GT.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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