Why is Goodyear stock so cheap?

This is a post that some would say shouldn’t be written, about a stock that, much like a Bumble Bee, shouldn’t be able to fly, and yet they both can. 

The Bumble Bee appears to defy physics. Goodyear Tire and Rubber Company GT US is defying market orthodoxy (and gravity?) by gaining more than +18.0% over the last month. 

Goodyear has been rallying with conviction, too. For example, on Friday, the 17th July, it closed more than 91.0% through the day’s range, which suggests that there was demand for the stock into the close and that the bulls had control of the stock in the session. Though admittedly volumes traded on the day were only around 75.0% of the daily averages of 12.40 million shares.

I have been watching GT for well over a month; they came onto my radar in mid-June as they broke above their 50-day moving average around $6.45 since then, they’ve rallied by some 85 cents, closing on Friday at $7.29.I have a sense that there could be more to come if the price can get above prior highs and failure points.

 I say that because it’s comfortably outperformed European rivals like Michelin, Pirelli and Continental in terms of 1-month price performance. 

What attracted me to Goodyear Tire? 

It was the fact that they shouldn’t be rallying at all, because all the omens are against them. 

For example, a negative/unstable geopolitical and macro background, higher oil and raw material prices. 

A consumer base that’s feeling the pinch, particularly where gasoline and diesel prices are concerned, with a recent survey (May 2026) suggesting that 44% of Americans are saying they are driving less because of the cost of fuel.

Sentiments that are likely to cause a further fall in the sales of tyres in the US, because President Trump’s war on Iran could well escalate back into a full-blown conflict, which puts oil and gas from the Persian Gulf off limits once more.

Despite this, an examination of the price action in GT US reveals a buy-the-dip mentality among traders in the stock. We have only seen one significant down day over the last month on 8th July, but the stock closed 90 cents above the lows seen then, on Friday.

I can’t make a strong case for Goodyear Tire beyond saying the stock stands out when it really shouldn’t, and that makes it intriguing to me. I can’t deny that this is speculative trade at best, but it doesn’t feel like a flash in the pan or a meme to me.

Performance 

Over the longer term, Goodyear’s share price performance has been poor; quite frankly, it printed around $10.62 in early February, then gapped lower before selling off to $6.14 by the 19th March. An attempted rally found resistance around $7.28 to $7.47 (levels to pay attention to going forward), from where the stock sold off again to $5.43.

However, since then, it hasn’t looked back.

Pros:

Traders are buying the stock despite strong fundamental and macro headwinds. 

It’s an old economy stock that’s completely uncorrelated with the AI trade or Chip stocks. GT is the 24th best performing stock in the S&P 400 Mid-cap index, over the last month, and it has outperformed the S&P 500 by almost +18.00% in that timeframe. 

Cons:

Goodyear Tire’s business could best be described as distressed, with declining sales, rising input costs and high debts. Continuation of the war on Iran into the third quarter could derail management’s attempts to get its cost base under control and could also dent consumer confidence and further limit journeys undertaken in driving season. 

Technical outlook:

Technically, the stock looks strong; it’s posted 12 new highs year to date, 7 of which have come in the last month, 4 in the last week. Looking at the 3-month,1-month and weekly price ranges, the stock finished the periods very close to the high points within them; it is in an uptrend, posting higher highs and higher lows. The rally was preceded by the appearance of a hammer back on the 19th of May and confirmed by the 10-day MA crossing up through the 50-day on June 26th.

Fundamental outlook:

If you were judging GT US solely on its fundamentals, then you’d steer well clear its losing money, has negative EPS, and has seen sales dip at home and abroad. It will report again on August 6th. Perhaps the best we can hope for is that losses are less than forecast and that growth rates are declining at a slower pace. The enterprise value of the business is at least 3-times greater than its market cap, so in theory it could be of interest to an activist investor, or even be a takeover target, though the buyer would need deep pockets and a strong constitution.