Has Goodyear Stock Reached the End of the Road?

GT is up 64% in 2021

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The Goodyear Tire & Rubber Company (NASDAQ:GT) will report first quarter earnings before market hours on Friday, April 30. Ahead of the event, GT's post-earnings history is worth looking into. 

Goodyear has outperformed earnings expectations on three out of the last four earnings reports released. However, only the most recent quarterly report from February yielded a positive post-earnings reaction. In the last eight quarters, six of GT's post-earnings reactions were negative, including a 16.6% bear gap in October. 

Goodyear stock is up 64.5% in 2021, but has spent the last month or so consolidating below the $18.50 level. Above here sits GT's March 4 annual high of $19.38, while its 40-day moving average sits below containing any major damage. 

GT Stock Chart

From a fundamental perspective, Goodyear is struggling in nearly every important aspect financially. Revenues and net income have been in a constant state of decline over the past three years. Recently, the company’s top line dropped 16.5%, from $14.75 billion in 2019 to $12.3 billion in 2020. Goodyear's bottom line also experienced nearly a $1 billion decrease, down to $1.25 billion, in total net losses during 2020. In addition, Goodyear has lost almost $2 billion in net income since 2018. Overall, investing in Goodyear stock seems to be not much more than a purely speculative play at the moment, especially following its massive upward move.

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