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General Dynamics (GD) AI Stock Analysis

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GD

General Dynamics

(NYSE:GD)

Rating:76Outperform
Price Target:
$355.00
▲(13.05%Upside)
General Dynamics boasts strong financial performance and positive earnings call highlights, which significantly contribute to its overall score. Technical analysis and valuation present a moderate outlook, with positive stock momentum but potential overvaluation risks. The company's strategic financial management and growth in key segments support its strong position in the industry.
Positive Factors
Backlog and orders
Backlog ended +14% y/y while a 2.2x B:B was well ahead of peers including B:B in Aero at 1.3x.
Financial outlook and guidance
Shares of General Dynamics are trading up 6% approaching all-time highs after the company reported second-quarter results above consensus and raised its full-year guidance.
Marine division performance
Marine sales rose 22% year-over-year, with improvements attributed to VCS and Columbia projects.
Negative Factors
Aerospace delivery delays
G800 deliveries have not yet started and G400 entry into service may be delayed.
Contract award pace
Management highlighted a slower-than-normal pace of contract awards in the first half, although indicated an improvement in the second quarter.
Market uncertainty
Uncertainty exists around Trump's proposed federal and civil budget cuts, which could affect GD's Tech segment.

General Dynamics (GD) vs. SPDR S&P 500 ETF (SPY)

General Dynamics Business Overview & Revenue Model

Company DescriptionGeneral Dynamics Corporation is a global aerospace and defense company headquartered in Reston, Virginia. The company operates in four main business segments: Aerospace, Marine Systems, Combat Systems, and Technologies. It is known for producing a wide range of products and services, including business jets, combat vehicles, weapons systems, munitions, information technology services, and shipbuilding.
How the Company Makes MoneyGeneral Dynamics generates revenue through a diverse portfolio of products and services offered across its business segments. In the Aerospace segment, the company earns money by designing, manufacturing, and servicing Gulfstream business jets. The Marine Systems segment contributes to revenue through the construction and maintenance of nuclear-powered submarines and other naval ships for military customers. The Combat Systems segment provides income from the sale of combat vehicles, weapons systems, and munitions to various global defense customers. The Technologies segment, which includes Information Technology and Mission Systems, generates revenue through the provision of IT services, communication systems, and other technology solutions to government and commercial clients. Key revenue sources also include long-term contracts with the U.S. Department of Defense and other government agencies, as well as international defense contracts.

General Dynamics Key Performance Indicators (KPIs)

Any
Any
Operating Earnings by Segment
Operating Earnings by Segment
Highlights profit generated by each business unit, providing insight into which segments drive the company's profitability and where operational efficiencies or challenges may exist.
Chart InsightsGeneral Dynamics' Aerospace segment is experiencing robust growth, significantly contributing to the company's overall financial performance, with a notable 45.2% revenue increase driven by higher aircraft deliveries. Despite this, the company faces challenges such as negative free cash flow and supply chain issues in Marine Systems. The Combat Systems and Technologies segments show steady growth, but uncertainties like tariffs could impact future performance. The strategic focus on Aerospace and shareholder returns suggests confidence, yet operational hurdles remain a concern.
Data provided by:Main Street Data

General Dynamics Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q2-2025)
|
% Change Since: -0.92%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and record order activity, particularly in the Marine Systems and Aerospace segments. However, challenges remain in the form of supply chain delays and flat revenue growth in Combat Systems. Margin pressure is also noted in the Aerospace segment due to new product deliveries. Overall, positives seem to outweigh negatives, indicating a strong position moving forward.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
Earnings of $3.74 per diluted share on revenue of $13 billion, with operating earnings of $1.3 billion and net income slightly over $1 billion. Revenue increased by 8.9% compared to the year-ago quarter, with operating earnings up almost 13% and net earnings up 12%.
Record Order Activity
Over $28 billion in orders for the quarter, with a book-to-bill ratio of 2.2:1. Marine Systems segment was a major contributor with several submarine construction contracts.
Backlog and Cash Generation
Record level of backlog at $103.7 billion, up 14% from a year ago. Operating cash flow of $1.6 billion for the quarter, with a cash conversion rate of 138%.
Marine Systems Revenue Growth
Revenue of $4.22 billion, up 22.2% year-over-year. Driven by Columbia-class and Virginia-class construction.
Aerospace Segment Performance
Revenue of $3.06 billion, a 4.1% increase, with operating earnings of $403 million, up 26.3% from the year-ago quarter. G700 delivery cadence and operating margin improving.
Negative Updates
Challenges at NASSCO
Unfavorable EAC adjustment leading to a 10-point decline in operating margin. Issues related to a flood and subsequent rework.
Combat Systems Revenue Stagnation
Revenue in the quarter of $2.28 billion is essentially flat versus the year-ago quarter, driven by the cancellation of the Booker program.
Supply Chain Delays in Marine Systems
Continued delays and quality problems in the supply chain affecting Electric Boat, though progress is being made.
Margin Pressure in Aerospace
G800 initial deliveries will carry lower margins, and G400 deliveries expected to cause future margin pressure.
Company Guidance
During the General Dynamics Second Quarter 2025 Earnings Conference Call, the company reported earnings of $3.74 per diluted share on $13 billion in revenue, with operating earnings of $1.3 billion and net income slightly over $1 billion. Revenue increased by 8.9% over the previous year's quarter, driven by growth in three of the four business segments, leading to a 12% rise in net earnings and a 14.7% increase in earnings per share. The company beat Street EPS consensus by $0.19. Year-to-date, revenue was up 11.3% to $25.3 billion, operating earnings increased by 17.4% to nearly $2.6 billion, and earnings per share rose by 20.5%. Orders reached over $28 billion, yielding a book-to-bill ratio of 2.2:1, with a significant contribution from the Marine Systems segment. The backlog reached a record $103.7 million, up 14% from the previous year. Operating cash flow for the quarter was $1.6 billion, translating to a free cash flow of $1.4 billion and a cash conversion rate of 138%. The company maintained a strong financial position with a cash balance of approximately $1.5 billion and a net debt position of $7.2 billion. The effective tax rate stood at 17.7% for the quarter.

General Dynamics Financial Statement Overview

Summary
General Dynamics showcases robust financial performance with strong revenue growth of 5.36% and solid profitability. The balance sheet reflects effective debt management with a declining debt-to-equity ratio, and cash flow metrics indicate efficient cash generation. The company is well-positioned within the aerospace and defense industry with a strong financial foundation.
Income Statement
85
Very Positive
General Dynamics shows robust financial performance with a strong TTM revenue growth of 5.36% and consistent profitability. The gross profit margin stands at 15.24%, and the net profit margin is healthy at 8.13%. EBIT and EBITDA margins are also strong at 10.30% and 11.96%, respectively, indicating efficient operations. The company demonstrates a solid upward trend in revenues and profits, aligning well with industry dynamics.
Balance Sheet
78
Positive
The balance sheet of General Dynamics reflects a stable financial position with a declining debt-to-equity ratio from 0.47 to 0.37, showcasing effective debt management. The return on equity is impressive at 17.32%, indicating high profitability relative to shareholder equity. The equity ratio is 41.45%, suggesting a balanced asset structure. However, maintaining leverage at current levels would be prudent to mitigate potential risks.
Cash Flow
80
Positive
Cash flow metrics are strong, with an operating cash flow to net income ratio of 1.23, indicating efficient cash generation relative to net income. Free cash flow shows a growth rate of 29.21%, driven by effective capital expenditures management. The free cash flow to net income ratio is 1.01, reflecting solid cash conversion. General Dynamics demonstrates a strong capacity for generating cash, supporting strategic investments and shareholder returns.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue47.72B42.27B39.41B38.47B37.92B
Gross Profit7.36B6.67B6.62B6.41B6.33B
EBITDA5.82B5.25B5.31B5.19B5.11B
Net Income3.78B3.31B3.39B3.26B3.17B
Balance Sheet
Total Assets55.88B54.81B51.59B50.07B51.31B
Cash, Cash Equivalents and Short-Term Investments1.70B1.91B1.24B1.60B2.82B
Total Debt10.68B11.08B10.50B11.49B13.00B
Total Liabilities33.82B33.51B33.02B32.43B35.65B
Stockholders Equity22.06B21.30B18.57B17.64B15.66B
Cash Flow
Free Cash Flow3.20B3.81B3.46B3.38B2.89B
Operating Cash Flow4.11B4.71B4.58B4.27B3.86B
Investing Cash Flow-953.00M-941.00M-1.49B-882.00M-974.00M
Financing Cash Flow-3.37B-3.09B-3.47B-4.59B-903.00M

General Dynamics Technical Analysis

Technical Analysis Sentiment
Positive
Last Price314.02
Price Trends
50DMA
286.34
Positive
100DMA
276.44
Positive
200DMA
273.71
Positive
Market Momentum
MACD
7.16
Negative
RSI
72.52
Negative
STOCH
78.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GD, the sentiment is Positive. The current price of 314.02 is above the 20-day moving average (MA) of 300.05, above the 50-day MA of 286.34, and above the 200-day MA of 273.71, indicating a bullish trend. The MACD of 7.16 indicates Negative momentum. The RSI at 72.52 is Negative, neither overbought nor oversold. The STOCH value of 78.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GD.

General Dynamics Risk Analysis

General Dynamics disclosed 14 risk factors in its most recent earnings report. General Dynamics reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

General Dynamics Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$51.08B30.108.90%1.75%2.93%43.29%
76
Outperform
$84.53B21.1017.91%1.86%11.85%16.12%
72
Outperform
$10.33B19.1412.27%2.02%-1.04%-21.80%
71
Outperform
$81.40B20.9026.50%1.49%-0.65%77.20%
65
Neutral
$11.05B15.765.13%1.92%3.11%-24.90%
64
Neutral
$98.18B23.6173.06%3.10%1.09%-35.50%
59
Neutral
$174.38B-162.23%-9.15%-406.76%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GD
General Dynamics
314.02
30.48
10.75%
BA
Boeing
233.06
47.63
25.69%
LHX
L3Harris Technologies
269.28
48.98
22.23%
HII
Huntington Ingalls
264.82
-5.63
-2.08%
LMT
Lockheed Martin
421.17
-92.91
-18.07%
NOC
Northrop Grumman
569.74
100.69
21.47%

General Dynamics Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
General Dynamics Promotes Danny Deep to EVP
Positive
Jun 9, 2025

On June 4, 2025, General Dynamics Corporation announced the promotion of Danny Deep to executive vice president, Global Operations. This strategic move is accompanied by a compensation package that includes a base salary of $1,200,000 and a target annual incentive of 130% of his salary, indicating the company’s commitment to strengthening its leadership team.

The most recent analyst rating on (GD) stock is a Buy with a $325.00 price target. To see the full list of analyst forecasts on General Dynamics stock, see the GD Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
General Dynamics Announces Key Leadership Changes
Positive
Jun 4, 2025

On June 4, 2025, General Dynamics announced several key leadership changes aimed at enhancing operational performance during a period of growth and change. Danny Deep has been promoted to executive vice president, Global Operations, to improve performance across business units. Jason Aiken will now oversee Combat Systems and retain Mission Systems, while Amy Gilliland and Mark Burns have been promoted to executive vice presidents, maintaining their roles as presidents of their respective divisions. These changes are expected to strengthen the company’s operational focus and leadership capabilities.

The most recent analyst rating on (GD) stock is a Buy with a $305.00 price target. To see the full list of analyst forecasts on General Dynamics stock, see the GD Stock Forecast page.

Executive/Board ChangesShareholder Meetings
General Dynamics Elects Board at Annual Meeting
Neutral
May 9, 2025

At the Annual Meeting of Shareholders on May 7, 2025, General Dynamics Corporation announced the election of its Board of Directors, with all nominees successfully elected. Shareholders also approved KPMG LLP as the independent auditor for 2025 and endorsed the executive compensation plan. However, a proposal for a Human Rights Impact Assessment report was rejected by the shareholders, indicating a focus on maintaining current operational strategies without additional human rights reporting.

Private Placements and FinancingRegulatory Filings and Compliance
General Dynamics Completes $750 Million Notes Sale
Neutral
May 7, 2025

On May 7, 2025, General Dynamics Corporation completed the sale of $750 million in 4.950% Notes due 2035, as part of a transaction involving major financial institutions like BofA Securities, J.P. Morgan Securities, and Wells Fargo Securities. This financial move, registered with the SEC, is expected to impact the company’s financial structure and potentially strengthen its market position by securing long-term funding.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 25, 2025