Is There Now An Opportunity In General Dynamics Corporation (NYSE:GD)?

Let's talk about the popular General Dynamics Corporation (NYSE:GD). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $225.96 at one point, and dropping to the lows of $195. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether General Dynamics's current trading price of $195.8 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at General Dynamics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for General Dynamics

What is General Dynamics worth?

According to my valuation model, General Dynamics seems to be fairly priced at around 8.93% below my intrinsic value, which means if you buy General Dynamics today, you’d be paying a fair price for it. And if you believe the company’s true value is $215, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like General Dynamics’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.

What does the future of General Dynamics look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. General Dynamics’s earnings over the next few years are expected to increase by 43.04%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in GD’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on GD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on General Dynamics. You can find everything you need to know about General Dynamics in the latest infographic research report. If you are no longer interested in General Dynamics, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.