Highlights

  • Ally shows 161.36% one-year basic EPS growth, a P/E of 8.96 and PEG of 0.46.
  • Third quarter GAAP EPS was $1.30, against $1.18 a year earlier.
  • Ally approved a $0.35 fourth quarter common dividend and repurchased $178 million of shares.
  • Ally executed a $6 billion retail auto credit risk transfer; the CET1 ratio was 10.2%.

Ally Financial (NYSE:ALLY) reported third quarter 2026 GAAP earnings per share of $1.30, and the undervalued growth stock figures read 161.36% one-year growth in basic earnings per share, a trailing twelve-month P/E of 8.96 and an expected-basis PEG of 0.46, with shares trading at USD 38.81 on October 28, 2026, up 0.22%. In its latest disclosures, the auto finance, insurance and banking company executed a $6 billion retail auto credit risk transfer during the third quarter, then on October 20 reported net income attributable to common shareholders of $401 million and approved a fourth quarter common dividend of $0.35 per share.

Based in Detroit, Michigan, and incorporated in Delaware, Ally describes itself as a U.S. financial holding company with $203 billion in assets and 9.7 million customers as of September 30, 2026. Ally Bank offers online banking products, and the company provides consumer and dealer auto financing, insurance and vehicle remarketing, along with corporate finance for equity sponsors and middle-market companies. Segments are Automotive Finance, Insurance, Corporate Finance, and Corporate and Other.

Growth: Third Quarter Earnings, Revenue and Originations

Net income attributable to common shareholders was $401 million in the third quarter against $371 million a year earlier. GAAP earnings per common share were $1.30 against $1.18 in both comparison periods. Adjusted EPS, a non-GAAP measure, was $1.34 against $1.15, up 16%.

GAAP total net revenue was $2,332 million against $2,168 million. Net interest margin of 3.62% was up 11 bps. Provision for credit losses was $529 million against $415 million, which the company attributed primarily to CECL reserve builds tied to asset growth.

Consumer auto originations were $12.9 billion, up 10%. Pre-tax income was $337 million in Automotive Finance against $421 million, and $80 million in Insurance against $79 million.

Valuation: P/E of 8.96, PEG of 0.46 and Returns on Equity

The P/E ratio of 8.96 is measured on trailing twelve-month earnings, and the PEG ratio of 0.46 on an expected basis. Return on GAAP shareholders' equity was 12.1% against 11.9% a year earlier, and core return on tangible common equity, a non-GAAP measure, was 13.1% against 12.3%. GAAP common shareholders' equity per share was $43.24 against $41.56.

On the third quarter call, Chief Executive Officer Michael Rhodes said the company is growing its core franchises, raising returns and maintaining risk discipline. Chief Financial Officer Russell Hutchinson said the dividend increase, the first since 2022, reflects higher earnings power and a stronger capital position.

Capital Returns, Liquidity and Funding

Ally repurchased $178 million of shares in the quarter and paid a $0.30 per share common dividend, unchanged from a year earlier. The Board approved $0.35 per share for the fourth quarter of 2026. The common equity tier 1 ratio was 10.2%, up 10 bps year over year, on risk-weighted assets of $158.2 billion. The $6 billion credit risk transfer, the second of 2026, generated approximately 25 bps of CET1 at issuance.

Cash and cash equivalents were $7.5 billion and highly liquid securities were $19.4 billion. Total current available liquidity was $61.2 billion, or 5.2x uninsured deposit balances. Retail deposits were $141.9 billion and total deposits were $155.8 billion, with deposits making up 86% of funding. Long-term debt was $18,778 million against $16,749 million a year earlier.

Disclosed Risks and Outlook

Automotive Finance pre-tax income decreased $84 million, which the company attributed primarily to higher provision expense and noninterest expense. The retail auto net charge-off rate was 1.89%, up 1 bp, and retail auto delinquencies of 30 or more days past due were 4.96%, up 6 bps.

On the call, Hutchinson said lease results included a loss on lease terminations tied to pressure on Stellantis auction prices and residual values, expected to persist into the fourth quarter. He said vintages from late 2025 and early 2026 show higher early life delinquency. Management cited persistent inflation and affordability pressure.

For full year 2026, management said it now expects net interest margin excluding OID of 3.6% to 3.65%, with the fourth quarter around 3.7%. It expects adjusted other revenue up 2% to 4%, against flat to up 5% previously, adjusted noninterest expense flat to up 1%, average earning asset growth of 5% to 6%, up from 3% to 5%, and a tax rate of 20% to 22%.