Why General Dynamics Corporation (NYSE:GD) Could Be Worth Watching

Today we're going to take a look at the well-established General Dynamics Corporation (NYSE:GD). The company's stock saw significant share price movement during recent months on the NYSE, rising to highs of US$249 and falling to the lows of US$217. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether General Dynamics' current trading price of US$229 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.

Check out our latest analysis for General Dynamics

Is General Dynamics Still Cheap?

Great news for investors – General Dynamics is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $310.14, but it is currently trading at US$229 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that General Dynamics’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from General Dynamics?

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. With profit expected to grow by 26% over the next couple of years, the future seems bright for General Dynamics. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since GD is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on GD for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GD. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you'd like to know more about General Dynamics as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for General Dynamics and you'll want to know about this.

If you are no longer interested in General Dynamics, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.