Goodyear (GT): Evaluating Valuation After NASCAR’s High-Profile Bristol Tire Launch Sparks Industry Debate

If you are following Goodyear Tire & Rubber (GT), last week’s NASCAR Bristol race probably caught your eye. The debut of Goodyear’s new right-side tire sparked intense debate across the motorsport world, as drivers navigated extreme tire wear and teams scrambled to adapt their strategies. With industry voices both praising the company’s willingness to experiment and raising concerns over the chaotic conditions, investors are left wondering what this moment says about Goodyear’s ability to innovate and its future in high-stakes performance markets.

This flurry of attention comes at an interesting point for Goodyear. Over the past year, the stock managed a modest 3% total return and is up 14% over a five-year stretch, yet it has slipped roughly 16% in the past 3 months alone. This signals fading momentum. While annual revenue and net income ticked up only slightly, the Bristol event gave the brand visibility and raised big picture questions about its willingness to push boundaries versus the risks of product experimentation in such a public arena.

After a year of flat performance and last week’s spotlight, is the market still overlooking growth potential here, or are investors already pricing in everything the next phase could bring?

Most Popular Narrative: 23% Undervalued

According to the most widely followed narrative, Goodyear Tire & Rubber shares are trading significantly below their estimated fair value. This suggests a sizable upside if the company's future plays out as analysts expect.

The company is actively focusing on premium and larger rim-size tire segments (18-inch and above). It is launching a significant number of new SKUs globally, which supports a richer product mix and potential for margin expansion as consumer preferences move upmarket. Goodyear's investment in modernizing its manufacturing footprint, digital supply chain initiatives, and the execution of the Goodyear Forward restructuring program (including plant closures and cost reductions) are expected to deliver sustained SG&A and COGS savings. These actions are aimed at supporting improved net margins and earnings over the medium term.

What’s behind this sharp undervaluation? Think new products, bold operational changes, and strategic bets on premium segments. Analysts are incorporating growth assumptions and profit expectations that point to a different story than the market’s price. The real surprise lies in the specific financial forecasts and valuation model that drive this bullish target. Want to uncover which forecasted numbers and margin goals are moving the needle? The deeper narrative reveals all the numbers shaping the case for a comeback.

Result: Fair Value of $11.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, mounting competition from low-cost imports and ongoing global trade disruptions could put pressure on Goodyear’s future margins and challenge this favorable outlook.

Find out about the key risks to this Goodyear Tire & Rubber narrative.

Another View: Discounted Cash Flow Perspective

Looking from another angle, the SWS DCF model also sees Goodyear shares as trading below their estimated fair value, which supports the case for undervaluation. However, could this long-range approach be missing key risks or shifts ahead?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Goodyear Tire & Rubber for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Goodyear Tire & Rubber Narrative

If your perspective differs or you’d rather dig into the numbers yourself, you can explore the data and build your own narrative in just a few minutes. Do it your way

A great starting point for your Goodyear Tire & Rubber research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Smart Investment Ideas?

If you want an edge on stocks beyond Goodyear, expand your portfolio with some of the market’s most compelling opportunities. These curated ideas could be your next winning move. Don’t miss the chance to get ahead of the crowd.

• Capture impressive yields by targeting companies paying at least 3% annual dividends in our exclusive dividend stocks with yields > 3%. This highlights steady income and long-term resilience.
• Spot future leaders in artificial intelligence with the powerful AI penny stocks, featuring innovative businesses riding the AI revolution wave.
• Go after value by searching for under-the-radar stocks trading below their intrinsic worth using our essential undervalued stocks based on cash flows. This is built for bargain hunters who want real upside potential.

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.

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