General Dynamics (GD) AI Stock Analysis

• Market Cap: $94.84B
• Dividend Yield: 1.73%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 22.6
• Beta (1Y): 0.56
• Revenue Growth: 11.86%
• EPS Growth: 17.39%
• Country: US
• Employees: 110,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 4.17
• Shares Outstanding: 270,120,450
• 10 Day Avg. Volume: 1,343,922
• 30 Day Avg. Volume: 1,240,742
• PEG Ratio: 1.63
• Price to Book (P/B): 3.55
• Price to Sales (P/S): 1.73
• P/FCF Ratio: 22.95
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 1.91
• Enterprise Value/Gross Profit: 12.64
• Enterprise Value/Ebitda: 16.49
• 1Y Price Target: $398.67
• Price Target Upside: 13.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $399.00 ▲(13.65% Upside)

The score is driven primarily by solid financial performance (steady growth, stable profitability, and improved leverage) and a strong earnings-call outlook (clear 2026 guidance and record backlog). Technicals are supportive but not strongly momentum-driven, while valuation is a modest headwind given the P/E and moderate dividend yield.

Positive Factors

Record backlog and contract pipeline

A $118B backlog and $179B total estimated contract value provide multi-year revenue visibility across segments, lowering near-term demand risk. High book-to-bill signals sustained government and international awards, supporting durable cash flow and program continuity over several years.

Robust free cash flow and deleveraging

High FCF generation and near-complete cash conversion improve balance-sheet optionality. Lower net debt and management's 100% FCF conversion target for 2026 support capital investment, pension/obligation funding and disciplined capital allocation without undermining long-term financial flexibility.

Diversified, high-performing segment mix

Balanced revenue sources across Marine, Combat, Aerospace and Technologies reduce reliance on any single market cycle. Strong order intake and rising deliveries in multiple segments underpin steady margins and resilience to sector-specific downturns, supporting sustained earnings power.

Negative Factors

Rising capital intensity and refinancing exposure

A large, sustained jump in capex raises structural cash needs and capital intensity, which can strain FCF if conversion falls short. Reliance on refinancing exposes interest cost risk; higher recurring interest would reduce free cash available for buybacks, dividends, or M&A over the medium term.

Persistent supply-chain and single-source bottlenecks

Ongoing supplier and sole-source constraints cap production scalability and delay deliveries, limiting revenue realization and leveraging productivity gains. Structural bottlenecks increase per-unit costs and create sustained margin pressure until multi-sourcing or capacity expansion is achieved.

Tariff headwinds and Technologies segment softness

Rising tariff costs are a structural margin headwind that directly reduce profitability on international supply chains. Coupled with low-single-digit growth and margin weakness in the Technologies segment, this risks compressing companywide operating margins and slowing secular growth in IT services revenues.

General Dynamics Business Overview & Revenue Model

Company Description

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment designs, manufactures, and sells business jets; and offers aircraft maintenance and repair, management, charter, aircraft-on-ground support and completion, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships. This segment also provides navy ships maintenance and modernization services; lifecycle support and repair services for navy surface ships; and program management, planning, engineering, and design support services for submarines and surface ships. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments. This segment also offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; and intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers. This segment also offers cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; software-defined networks; everything-as-a-service; defense enterprise office system solutions; and unmanned undersea vehicle manufacturing and assembly services. General Dynamics Corporation was founded in 1899 and is headquartered in Reston, Virginia.

How the Company Makes Money

General Dynamics generates revenue through multiple key streams, primarily from government contracts and sales to commercial clients. The Aerospace segment contributes significantly to revenue through the production and servicing of business jets and military aircraft. The Combat Systems segment earns money by supplying armored vehicles, munitions, and other defense equipment to military organizations. Information Technology and Mission Systems generate revenue from providing IT services, cybersecurity solutions, and mission support for defense and intelligence agencies. Additionally, strategic partnerships with various government entities and private companies enhance GD's market position, providing a steady flow of contracts and repeat business, thus contributing to its overall earnings.

General Dynamics Financial Statement Overview

Summary

Strong multi-year revenue growth with stable ~10% operating margins and improving leverage (debt-to-equity down to ~0.31). Offsetting this, gross margin has trended lower and free cash flow declined in 2024–2025, creating a near-term cash conversion risk despite higher earnings.

Income Statement

Revenue has compounded steadily from $37.9B (2020) to $52.6B (2025), with a clear step-up in 2024–2025. Profitability is solid and consistent for the sector, with operating margins holding near ~10% across the period. Offsetting this, gross margin has drifted down (from ~16.7–16.8% in 2020–2022 to ~13.8% in 2025), and net margin remains relatively flat around ~8%, suggesting limited operating leverage despite higher sales.

Balance Sheet

Leverage has improved meaningfully: debt-to-equity declined from ~0.83 (2020) to ~0.31 (2025), while equity has grown to $25.6B. Returns on equity remain healthy in the mid-to-high teens (about ~16% in 2025), indicating efficient capital use. The main watch item is that total assets have risen alongside the business, but the data provided doesn’t show liquidity detail—so the view is primarily favorable on leverage and shareholder capital strength.

Cash Flow

Cash generation is positive and supportive: operating cash flow rose to $5.1B (2025) and free cash flow was $4.0B, with free cash flow consistently covering roughly three-quarters to four-fifths of net income over time. However, free cash flow declined in 2024 and again sharply in 2025 (about -18% in 2025), creating a near-term quality-of-earnings and cash conversion concern even as reported profits grew.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	52.55B	47.72B	42.27B	39.41B	38.47B
Gross Profit	7.95B	7.36B	6.67B	6.62B	6.41B
EBITDA	6.10B	5.82B	5.25B	5.31B	5.19B
Net Income	4.21B	3.78B	3.31B	3.39B	3.26B
Balance Sheet
Total Assets	57.25B	55.88B	54.81B	51.59B	50.07B
Cash, Cash Equivalents and Short-Term Investments	2.33B	1.70B	1.91B	1.24B	1.60B
Total Debt	8.01B	10.68B	11.08B	12.11B	13.18B
Total Liabilities	31.63B	33.82B	33.51B	33.02B	32.43B
Stockholders Equity	25.62B	22.06B	21.30B	18.57B	17.64B
Cash Flow
Free Cash Flow	3.96B	3.20B	3.81B	3.46B	3.38B
Operating Cash Flow	5.12B	4.11B	4.71B	4.58B	4.27B
Investing Cash Flow	-1.29B	-959.00M	-945.00M	-1.49B	-882.00M
Financing Cash Flow	-3.19B	-3.37B	-3.09B	-3.47B	-4.59B

General Dynamics Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 351.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GD, the sentiment is Neutral. The current price of 351.09 is below the 20-day moving average (MA) of 358.17, above the 50-day MA of 346.16, and above the 200-day MA of 315.44, indicating a neutral trend. The MACD of 3.29 indicates Positive momentum. The RSI at 46.96 is Neutral, neither overbought nor oversold. The STOCH value of 34.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GD.

General Dynamics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHX	75 Outperform	$64.13B	41.74	8.20%	1.61%	2.83%	47.00%
NOC	75 Outperform	$98.25B	23.91	26.17%	1.55%	-0.14%	72.35%
RTX	75 Outperform	$269.40B	40.30	10.74%	1.44%	8.79%	39.63%
GD	74 Outperform	$94.84B	22.65	17.66%	1.73%	11.86%	17.39%
LMT	74 Outperform	$145.92B	28.97	76.87%	2.77%	2.88%	-35.15%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	56 Neutral	$183.02B	123.19	289.13%	―	10.19%	-6.03%

General Dynamics Corporate Events

General Dynamics Announces Upcoming Controller Transition

On December 3, 2025, General Dynamics announced that William A. Moss will retire as vice president and controller on March 31, 2026. Dana O. Maisano, with over 20 years at the company and experience in various finance roles, will succeed him as controller on April 1, 2026, potentially impacting the company’s financial operations and continuity.

The most recent analyst rating on (GD) stock is a Buy with a $380.00 price target. To see the full list of analyst forecasts on General Dynamics stock, see the GD Stock Forecast page.

Danny Deep Appointed President of General Dynamics

On December 3, 2025, Danny Deep, a veteran with over 20 years at General Dynamics, will assume the role of president. His compensation includes a base salary of $1,300,000, with a target annual incentive at 150% of his salary, and a long-term equity-based incentive as outlined in the company’s proxy statement.

The most recent analyst rating on (GD) stock is a Buy with a $380.00 price target. To see the full list of analyst forecasts on General Dynamics stock, see the GD Stock Forecast page.