Solid Price-to-Sales Ratio
Strong Return on Equity
Low Debt Levels
Adequate Interest Coverage
📈 Strong Demand for Gas Power
🔋 Electrification Segment Growth
💰 Strong Financial Performance
🌍 Decarbonization Technologies
🚀 Projected Revenue Growth
High Price-to-Earnings Ratio
Low Profit Margins
Weak Liquidity Ratios
⚠️ Challenges in Wind Segment
🔄 Uncertainty in Wind Market
Overall, GE Vernova exhibits strong business quality driven by significant demand in gas power and electrification, alongside a solid financial foundation. However, challenges in the wind segment and uncertainties in future growth prospects require careful management. The company is well-positioned for future growth, particularly in decarbonization technologies.
Analysis Date: January 22, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$217.28
Current Market Price: $272.37
IV/P Ratio: 0.80x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-25.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for GEV
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (48.10)
P/B ratio ≤ 1.5 (7.82)
Current ratio ≥ 2.0 (1.08x)
Long-term debt < Net current assets (0.33x)
Margin of safety (-25.0%)
GEV does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The return on equity (ROE) stands at 16.74%, indicating effective management in generating profit from shareholders' equity.
The net profit margin of 4.44% and operating profit margin of 1.71% suggest that the company faces challenges in converting revenue into profit.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
16.74%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.94%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
17.52%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
4.44%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.11 and debt-to-assets ratio of 0.02 indicate a strong balance sheet with minimal reliance on debt.
An interest coverage ratio of 8.09 shows that the company can comfortably cover its interest expenses, reflecting good financial health.
The current ratio of 1.08 indicates that the company barely has enough assets to cover its liabilities, while a quick ratio of 0.83 suggests potential liquidity concerns.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.10x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.08x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
GE Vernova has seen a significant increase in demand for gas generation, achieving approximately 20 gigawatts of gas orders, which is double the previous year's level. This demand is linked to growth in data center hyperscaler needs associated with AI, indicating a robust market position.
The electrification segment achieved 18% revenue growth and over 500 basis points of margin expansion in 2024. The strong demand for grid modernization and critical components showcases GE Vernova's competitive advantage in this growing market.
In 2024, GE Vernova booked $44 billion in orders and increased cash balance to over $8 billion. The company demonstrated effective cash management and strong free cash flow generation, reinforcing its financial stability.
The wind segment continues to face challenges with declining orders and significant contract losses, particularly in offshore wind. This uncertainty could impact overall business quality.
GE Vernova is actively investing in decarbonization technologies, such as carbon capture and small modular nuclear reactors (SMRs). This positions the company to meet future energy needs and regulatory requirements.
For 2025, GE Vernova expects revenue between $36 billion and $37 billion, reflecting mid-single-digit growth. This solid outlook indicates confidence in continued market demand and operational execution.
The wind segment's future remains uncertain with projected revenue decline and modest backlog expectations. This could hinder overall growth prospects for GE Vernova if not addressed.