General Motors' (GM) Q1 results show that the company managed to start the year off strong despite facing macro headwinds, Wedbush said in a note Wednesday.
The company's Q1 results saw a "slight top-line beat with a strong bottom-line beat" as it is still navigating a more challenging electric vehicle scenario, the note said, adding GM is moving to "higher-margin revenue streams to drive long-term cash flow generation."
The company is also benefitting from the US Supreme Court ruling on tariffs, the note said.
Wedbush highlighted the fact that GM's digital services segment is achieving incremental momentum with deferred revenue reaching $5.8 billion, an increase of more than 50% year on year, and recognized revenue of $750 million, up 20% year on year.
The company keeps "adding more subscribers to its digital services revenue stream with a monthly average revenue per subscriber of ~$20," the note said.
Meanwhile, the company said that the Iran war has increased its costs, but Wedbush believes that GM will be able to "navigate a more difficult macro backdrop by offsetting cost pressures through spend reduction across other areas of the business."
Wedbush kept GM's outperform rating and $95 price target.
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