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More Reading from MarketBeat Ally Financial Pops on Q4 Earnings Beat and $2 Billion BuybackAuthor: Jordan Chussler. Originally Published: 1/23/2026. 
Article Highlights - The financials sector has been the S&P 500’s worst performer over the past month, posting a loss of 2.99%.
- Shares of financial services firm Ally jumped 7% on Wednesday after the company reported record EPS growth.
- The company also announced that it has authorized a $2 billion stock buyback program.
Over the past month, the financial services sector has been the worst-performing group in the S&P 500, down 2.99%. Over the past six months, its modest 1.26% gain ranks second-worst among sectors. But as Q4 earnings season begins in earnest, bank stocks are underscoring the sector's longer-term value as earnings beats and solid forward guidance work to restore investor confidence. Imagine a bull market so powerful, every single investor became a millionaire. Not by finding the next NVIDIA or Bitcoin, but by owning a simple index fund.
It sounds impossible. Yet it happened – just a short time ago. Now a legendary figure says: "Brace yourselves. It's about to happen here, in America. But fair warning – it could be the worst thing that ever happens to you."
This story has received little coverage in the press. But if history repeats, it could bump tens of millions of Americans into a 7-figure net worth practically overnight. Click here for the full story. That dynamic was on display when online bank Ally Financial (NYSE: ALLY) reported Q4 and full-year results on Wednesday, Jan. 21, sending the stock nearly 7% higher on the news. Ally Reports Record Q4 Earnings Growth Ally posted Q4 earnings of $1.09 per share, topping the consensus estimate of $1.02. Quarterly revenue came in at $2.17 billion—a 4.8% year-over-year (YOY) increase and slightly ahead of analyst expectations of $2.15 billion. For the full year 2025, Ally reported adjusted total net revenue of $8.5 billion and core pre-tax income of $1.6 billion. On the company's earnings call, CEO Michael Rhodes noted the firm generated $1.5 billion in written insurance premiums—a record for Ally—alongside YOY EPS growth of 62%, also a record. The EPS improvement was notable after annualized earnings contractions of -38.81%, -44.93%, and -35.02% in 2022, 2023, and 2024, respectively. Ally attributed part of 2025's strong EPS growth to record consumer auto applications. The company logged 3.8 million applications in Q4, equating to $10.8 billion in loan originations; on an annual basis that figure was about $43.7 billion, up 11% YOY. The company also authorized a $2 billion share buyback program and issued 2026 guidance that includes an expected 5% revenue increase. Rhodes added that Ally "ended the year with $144 billion in retail deposit balances, reinforcing our position as the largest all-digital direct bank in the United States," and that the bank "now serve[s] 3.5 million customers as 2025 marked our 17th consecutive year of customer growth." With a trailing EPS of $1.66 and a trailing 12-month price-to-earnings (P/E) ratio of 25.52, Ally's earnings are forecast to rise about 53.22% next year, from $3.57 to $5.47 per share. Ally's Dividend Pays Investors to Patiently Wait for the Upside The average 12-month price target of $49.44 for ALLY implies nearly 17% upside. With a forward P/E of just 11.88, the stock looks increasingly like a value opportunity. As with most financial institutions, Ally pays a dividend to patient shareholders. Currently, that dividend amounts to $1.20 per share annually, which equals about a 2.83% yield based on today's price. While Ally's dividend payout ratio of more than 72% may give some investors pause, the company has a five-year annualized dividend growth rate of 12.03%, suggesting the payout is sustainable. The next quarterly payment of $0.30 per share is scheduled for Tuesday, Feb. 17, to shareholders of record before the ex-dividend date of Monday, Feb. 2. What Wall Street Thinks About Ally Financial? So far in January, Ally has received upgrades from Evercore, Wells Fargo, and Bank of America to Outperform, Overweight, and Buy, respectively. The firms cited improving credit trends and growing confidence in Ally's net interest margin—the spread between interest earned on assets and interest paid on deposits and debt. Of the 18 analysts covering ALLY, 13 rate the stock a Buy, five rate it a Hold, and none rate it a Sell. Overall, it carries a Moderate Buy rating. According to TradeSmith, the stock's financial health falls in the Green Zone, where it has been for more than three months. Meanwhile, institutional ownership remains above average at nearly 89%, with inflows of $2.46 billion outpacing outflows of $1.62 billion over the past 12 months. Current short interest stands at 3.5%, or just over 308,000 shares out of the 10.7 million shares outstanding. Notably, Ally scores higher than 99% of the companies evaluated by MarketBeat and ranks 25th out of 907 stocks in the finance sector.
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