Honda Motor stock closed at ¥1,636.5, leaving investors with a flat week after a small 7 day decline and a punchy 90 day gain near 29%. The market came in focused on recent losses and a weak balance between debt and cash generation. The headline today is simple: Honda Motor just reported a profitable quarter with Q1 2027 basic earnings per share of ¥115.84 on revenue of ¥6,061,514m, set against a backdrop of trailing 12 month losses. Short term traders saw noise; long term holders saw the first concrete test of Honda Motor’s reset plan.

Is Honda Motor a genuine undervalued turnaround, or just a low priced stock with unresolved risks? See how TSE:7267 screens on cash flows, peer P/S multiples, and fair value gaps in the valuation analysis for Honda Motor

Q1 2027 Earnings Summary

• Revenue, Q1 2027 vs. Q1 2026: ¥6,061,514m vs. ¥5,340,268m (up about 13.5%)
• Net Income, Q1 2027 vs. Q1 2026: ¥450,915m vs. ¥196,670m (up about 129.3%)
• Basic EPS, Q1 2027 vs. Q1 2026: ¥115.84 vs. ¥46.80 (up about 147.5%)
• Trailing 12 Month Net Income, Q1 2027 vs. Q1 2026: loss of ¥169,696m vs. profit of ¥637,847m (moved from profit to loss over the period)

Prefer readable charts instead of another wall of Honda Motor earnings tables and ratios. See a clear visual view of its valuation in the full company report for Honda Motor.

Honda Hybrid Reset Shows Early Traction

The bullish story around Honda Motor is that hybrids and motorcycles can carry earnings while the EV reset plays out. Q1 2027 results give some concrete milestones. Revenue of ¥6,061,514m and net income of ¥450,915m more than doubled year on year, which matches the idea that core operations are starting to absorb the earlier EV impairment shock. Basic EPS of ¥115.84 versus ¥46.80 a year ago lines up with management’s message from May that Honda is “back on a profit trajectory” after its first annual loss since listing.

At the same time, the trailing 12 month net loss of ¥169,696m shows the turnaround is not yet through the system. The motorcycle and hybrid push is clearly helping reported profit in the latest quarter. However, the data still reflect a group in reset rather than a fully repaired earnings engine.

Access the analyst estimates for Honda Motor to see where the consensus models suggest Honda Motor’s calm share price today could mask a sharper multi year earnings inflection.

Honda Bear Case: Turnaround Still Has Gaps

The core worry around Honda Motor is that electrification delays, recall costs and capital intensity will keep the auto business structurally weak even if hybrids sell well. Q1 profit recovery helps, yet it does not settle that argument. Trailing 12 month results still show a net loss of ¥169,696m, which means the large EV impairment and reset are not fully behind the company.

Bears also warned that heavy spending and restructuring could cap free cash flow and pressure margins. Management is committing ¥6.2t of investment over three years while the auto segment remains in repair and has guided to lower operating and pretax profit for FY27 despite higher volumes. That is exactly the kind of mix shift and margin drag critics flagged. Add the million vehicle SUV and truck recall sitting on key ICE and hybrid models, and this quarter looks more like an early step than a bearish thesis fully disproved.

After heavy EV impairments, major recalls and a stretched dividend, you may want to review whether these issues are isolated. Scan our risk analysis for Honda Motor which shows 2 important warning signs

Stay Ahead Of Your Next Move

If Honda Motor’s reset story and the swing from trailing losses to a profitable Q1 have your attention, register for free with Simply Wall St and add it to a Watchlist to track price against fair value and watch for a better entry point. Once you are invested, use the Portfolio Command Center to cut through noise and focus on the most important updates that could affect your holdings. For a broader view, tap into the Community to see how other investors are thinking about opportunities and risks around Honda Motor. By spotting potential catalysts and pressure points early, you can move faster and stay a step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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