GE Vernova Inc. (GEV) AI Stock Analysis

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GE Vernova Inc.

(NYSE:GEV)

69Neutral

GE Vernova Inc. presents a compelling investment case with a strong financial position and improving profitability, particularly in its Power and Electrification segments. The company's zero-debt status and strategic focus on cash flow generation are significant strengths. However, challenges in the Wind segment and a high P/E ratio indicate risks that need to be monitored closely.

Positive Factors

Growth Potential

The Electrification segment shows potential upside to FY25 guidance, implying opportunities for growth.

Tariff Positioning

The company is favorably positioned on tariffs compared to competitors, particularly in the Power and Wind segments.

Negative Factors

Market Concerns

Shares of GEV have traded off around 29% since concerns around DeepSeek surfaced.

Wind Segment Risks

There are emerging risks in the wind segment, particularly under the current administration, with slower permits and a cautious approach to new capacity additions.

GE Vernova Inc. (GEV) vs. S&P 500 (SPY)

Market Cap

$89.33B

Dividend Yield0.08%

Average Volume (3M)4.76M

Price to Earnings (P/E)58.1

Beta (1Y)1.53

Revenue Growth5.05%

EPS GrowthN/A

CountryUS

Employees76,800

SectorGeneral

Sector StrengthN/A

IndustryRenewable Utilities

Share Statistics

EPS (TTM)5.63

Shares Outstanding273,345,580

10 Day Avg. Volume5,267,338

30 Day Avg. Volume4,758,561

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.64

Price to Cash Flow (P/CF)25.00

P/FCF Ratio40.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$429.60

Price Target Upside31.45% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering17

GE Vernova Inc. Business Overview & Revenue Model

Company DescriptionGE Vernova Inc. (GEV) is a leading provider in the energy sector, specializing in renewable energy, power generation, and energy management. The company operates across various segments including wind turbines, gas power, grid solutions, and digital services. GEV focuses on delivering sustainable and efficient energy solutions to meet the growing global demand for cleaner energy sources.

How the Company Makes MoneyGE Vernova Inc. makes money primarily through the sale and service of its energy products and solutions. Key revenue streams include the sale of wind turbines and related services, gas power equipment and maintenance services, and digital solutions for energy management. The company also generates income through long-term service agreements and partnerships with utility companies and governments for grid infrastructure projects. Additionally, GEV benefits from strategic collaborations and investments in renewable energy projects, which contribute to its earnings by expanding its market presence and enhancing its technological capabilities.

GE Vernova Inc. Financial Statement Overview

Summary

GE Vernova Inc. shows resilience with improved revenue and profitability metrics. The balance sheet is strong, with zero debt and rising equity, providing a stable foundation for growth. However, cash flow challenges remain, requiring a strategic focus on enhancing cash generation from operations.

Income Statement

Positive

GE Vernova Inc. shows a positive trajectory in revenue growth with a 5.10% increase from 2023 to 2024. The company improved its net income from a loss in 2023 to a profit in 2024, indicating a turnaround. Gross profit margin improved from 14.94% in 2023 to 17.41% in 2024, reflecting better cost management. However, the EBIT margin remains low at 1.35% in 2024, suggesting room for improvement in operational efficiency.

Balance Sheet

Positive

GE Vernova Inc. has a strong equity position with an increasing stockholders' equity from 2023 to 2024. The equity ratio improved to 18.54% in 2024, indicating a solid capital structure. With no total debt in 2024, the company has eliminated its debt burden, enhancing financial stability. Return on Equity (ROE) improved significantly to 16.26% in 2024 from negative figures, showcasing strong profitability for shareholders.

Cash Flow

Positive

The cash flow statement reveals challenges, as free cash flow turned negative in 2024. Free cash flow growth rate is negative, indicating cash constraints despite the improvement in net income. The operating cash flow to net income ratio was zero in 2024, suggesting reliance on non-operational sources for cash. The company needs to enhance its operational cash generation to support sustainable growth.

TTM	Dec 2024	Dec 2023	Dec 2022
Breakdown
Income Statement		Total Revenue
16.87B	34.94B	33.24B	29.65B
	Gross Profit
2.60B	6.08B	4.96B	3.65B
	EBIT
-372.00M	471.00M	-923.00M	-1.74B
	EBITDA
504.00M	471.00M	932.00M	-1.33B
	Net Income Common Stockholders
-220.00M	1.55B	-438.00M	-2.74B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.21B	8.21B	1.55B	2.07B
	Total Assets
51.48B	51.48B	46.12B	44.47B
	Total Debt
1.04B	1.04B	1.18B	1.17B
	Net Debt
-7.16B	-7.16B	-367.00M	-899.00M
	Total Liabilities
40.89B	40.89B	37.74B	32.86B
	Stockholders Equity
9.55B	9.55B	7.42B	10.65B
Cash Flow		Free Cash Flow
837.00M	1.70B	442.00M	-627.00M
	Operating Cash Flow
1.24B	2.58B	1.19B	-114.00M
	Investing Cash Flow
-298.00M	-37.00M	-734.00M	-322.00M
	Financing Cash Flow
-360.00M	3.65B	-408.00M	811.00M

GE Vernova Inc. Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price326.81

Price Trends

50DMA

330.26

Negative

100DMA

340.95

Negative

200DMA

281.65

Positive

Market Momentum

MACD

-5.79

Negative

RSI

47.21

Neutral

STOCH

26.81

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEV, the sentiment is Neutral. The current price of 326.81 is above the 20-day moving average (MA) of 315.25, below the 50-day MA of 330.26, and above the 200-day MA of 281.65, indicating a neutral trend. The MACD of -5.79 indicates Negative momentum. The RSI at 47.21 is Neutral, neither overbought nor oversold. The STOCH value of 26.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GEV.

GE Vernova Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWEN	73 Outperform	$5.61B	37.61	4.23%	6.00%	1.15%	10.99%
BEPC	70 Outperform	$9.03B	30.80	6.15%	5.40%	-8.26%	―
GEV	69 Neutral	$89.33B	58.09	18.30%	0.08%	5.05%	―
RNW	62 Neutral	$2.15B	85.55	2.00%	―	-1.77%	-41.65%
CEG	57 Neutral	$67.50B	18.10	31.12%	0.67%	6.89%	137.32%
Sector *	54 Neutral	$4.00B	-17.16	-14.99%	6.34%	25.52%	-80.16%
SMR	46 Neutral	$4.56B	―	-38.37%	―	62.41%	-85.81%

* General Sector Average

Performance Comparison

GEV

GE Vernova Inc.

309.95

173.48

127.12%

CWEN

Clearway Energy

27.55

5.39

24.32%

BEPC

Brookfield Renewable

25.93

3.84

17.38%

SMR

NuScale Power

14.85

9.53

179.14%

RNW

ReNew Energy Global

5.79

-0.06

-1.03%

CEG

Constellation Energy Corporation

204.49

12.92

6.74%

GE Vernova Inc. Earnings Call Summary

Earnings Call Date: Jan 22, 2025 | % Change Since: -21.44% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong order growth, significant margin expansion, and strategic advancements in the Power and Electrification segments. However, challenges in the Wind segment and uncertainty in onshore wind markets were noted. Overall, the sentiment is positive due to the outweighing successes and strategic positioning for future growth.

Highlights

Record Order and Revenue Growth

GE Vernova achieved record quarterly orders and revenues in Q4 2024, with orders increasing by 22% year-over-year to $13.2 billion and revenue rising by 9%.

Significant Margin Expansion

Adjusted EBITDA margin expanded by 440 basis points to reach 10.2% in Q4, with growth across all segments.

Electrification Segment Success

Electrification segment achieved 18% revenue growth and over 500 basis points of margin expansion for the year, driven by strong demand for grid solutions.

Power Segment Growth

Power segment reported 7% revenue growth and nearly 200 basis points of margin expansion in 2024, with significant growth in equipment and services orders.

Strong Cash Flow and Capital Strategy

GE Vernova generated $1.7 billion of free cash flow in 2024, nearly doubling its cash balance to over $8 billion, supported by strategic divestitures.

SMR Deployment Acceleration

Announcement of accelerated deployment of the BWRX-300 small modular nuclear reactor in partnership with several major U.S. utilities.

Lowlights

Challenges in Wind Segment

Wind segment faced difficulties, with a 41% decrease in orders and significant losses in offshore projects due to execution delays and blade events.

Uncertain Market Conditions for Onshore Wind

Continued uncertainty in the timing of North America onshore wind order inflection, with customers facing interconnection queues and higher interest rates.

Company Guidance

During the fourth quarter earnings call for GE Vernova, the company provided guidance indicating strong growth prospects driven by significant orders and backlog across its segments. For the full year 2024, GE Vernova reported $44 billion in orders and $35 billion in revenue, with EBITDA margin expanding across all segments, reaching 10.2% in Q4. They highlighted a substantial increase in their equipment backlog to $43 billion, with a $6 billion margin addition over the past two years. The Power segment experienced a 7% revenue growth with nearly 200 basis points of margin expansion, while Electrification achieved an 18% revenue increase and over 500 basis points of margin expansion. Wind segment EBITDA losses were nearly halved, reflecting progress in their turnaround efforts. The company ended the year with a robust cash balance of over $8 billion, supported by strong free cash flow generation and strategic divestitures. Looking ahead to 2025, GE Vernova expects mid-single-digit revenue growth, continued margin expansion, and free cash flow between $2 billion and $2.5 billion, driven by a growing and more profitable backlog.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.