General Dynamics (GD) valuation after new partnerships, record backlog and three straight quarters of double‑digit earnings growth

General Dynamics (GD) has been getting fresh attention after a run of upbeat headlines, including new shipbuilding partnerships and AI collaborations, as well as three straight quarters of double digit earnings growth and a record defense backlog.

See our latest analysis for General Dynamics.

Those developments seem to be feeding into the share price story, with the stock now at $341.70 and a strong year to date share price return of roughly 31 percent helping underpin a robust five year total shareholder return of about 154 percent. This suggests momentum is still very much on General Dynamics' side.

If these defense tailwinds have you rethinking the sector, it is also worth scanning aerospace and defense stocks for other aerospace and defense names that fit your strategy.

Yet with the shares already up strongly and trading only modestly below analyst targets, the key question now is whether General Dynamics still offers upside for new buyers or if the market has already priced in its future growth.

Most Popular Narrative Narrative: 10.3% Undervalued

Compared with the last close at $341.70, the most followed narrative sees General Dynamics’ fair value closer to $380, implying further upside from here.

Robust multi year order intake and record backlog driven largely by increased global defense spending and rising geopolitical instability provide strong visibility into future revenue growth across key segments, especially Marine and Aerospace.

Read the complete narrative.

Curious how steady, mid single digit growth assumptions and expanding margins can still support a richer future earnings multiple than today? Want to see the exact revenue, profit, and discount rate inputs behind that near 10 percent upside call? The full narrative lays out the step by step math that turns today’s backlog and earnings base into tomorrow’s valuation target.

Result: Fair Value of $380.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, supply chain setbacks in Marine and shifting defense priorities in Technologies could squeeze margins and temper the upside implied by today’s backlog.

Find out about the key risks to this General Dynamics narrative.

Build Your Own General Dynamics Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding General Dynamics.

Looking for more investment ideas?

Do not stop at one great defense name when you can quickly scan fresh opportunities tailored to your style using the Simply Wall Street Screener today.

• Capture potential bargains early by reviewing these 908 undervalued stocks based on cash flows that strong cash flow analysis suggests the market may be overlooking.
• Ride powerful innovation trends by assessing these 26 AI penny stocks that are pushing the frontier of artificial intelligence and automation.
• Strengthen your passive income strategy by checking these 15 dividend stocks with yields > 3% that aim to combine reliable yields with solid business quality.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com