Should Ford stock be bought now?

Ford Motor Company (NYSE:F) had a great year in 2025, when its share price rose 33 percent. This victory came much earlier S&P 500which was likely a surprise to investors. Regardless, the company continues to navigate the current economic climate and deal with ongoing security issues.

Is it Detroit auto stock offer a profitable buying opportunity now?

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Ford just announced another return round. More than 1.7 million SUVs were recalled due to backup camera problems. And nearly 605,000 SUVs were recalled due to a potential windshield wiper motor failure. This continues a troubling streak for the company, which set the record in 2025 for the most recalls in a single year, issuing more than 150.

In addition to damaging Ford’s reputation, these recalls can also negatively impact the company’s bottom line. This is clearly not an encouraging development, given that Ford’s financial position is not exactly thrilled.

During the last decade, the company’s operating profit percentage has been only 1.9%. Although this is one of the world’s largest automakers, having sold 1.8 million units year-on-year in February, Ford has shown zero impact over the years. In other words, while its turnover has grown, profits have not been able to grow faster.

This is the nature of the industry. A massive cost structure and huge capital expenditures are necessary for Ford to remain competitive. Investors have no reason to believe that the business can achieve strong earnings growth consistently in the future.

What makes matters worse is how difficult it can be to predict the development of demand. For example, Ford completely miscalculated the success of its Model e electric car division. In the fourth quarter (ended 12/31/2025), it took a substantial $19.5 billion charge to shift its strategy away from electric cars and focus more on hybrids. Demand for gas-powered vehicles is also not stable, as macro forces can significantly affect Ford’s financial results.

I don’t think Ford is a quality company for the reasons just discussed. And that’s why this auto stock is not worthy of investment consideration. This is especially true for those who are interested in owning some of them the best companies for five years or more.

The stock trades at a cheap forward rate of 8.3, which supports a very high dividend yield of 4.9 percent. However, this low valuation is justified. Investors buying Ford stock are likely to underperform the overall market over the long term.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks listed. The Motley Fool has a disclosure policy.

Is Ford stock a buy now? it was originally published by The Motley Fool