Will Strong Q2 Earnings and Surging Backlog Redefine General Dynamics' (GD) Outlook?

• General Dynamics recently reported second-quarter 2025 earnings per share of US$3.74, surpassing estimates with a 14.7% year-over-year increase, while its order backlog rose to US$103.68 billion from US$88.66 billion in the previous quarter.
• This performance was accompanied by a series of upward analyst estimate revisions, highlighting increased confidence in the company’s operating outlook within the aerospace and defense sector.
• With the backlog growing by over US$15 billion, we'll examine how this expands revenue visibility in General Dynamics' investment narrative.

AI is about to change healthcare. These 27 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

General Dynamics Investment Narrative Recap

To be a General Dynamics shareholder today, you have to believe in the durability of multi-year defense spending and the reliability of the company’s expanding backlog, now at US$103.68 billion, to support ongoing revenue growth. The recent earnings beat and strengthened outlook improve near-term confidence in order execution, but do not fundamentally alter the largest immediate risk: ongoing vulnerability to operational disruptions and supply chain issues, particularly in the Marine segment, that could impact delivery schedules and profitability.

Among this quarter’s announcements, the reported absence of new share repurchases stands out, especially after prior buybacks earlier this year. With a rising backlog driving record revenue visibility, the company’s choice to pause repurchases underscores the importance of maintaining financial flexibility as operational demands and capital expenditures increase. But even with a robust order book, it remains crucial for investors to watch for...

Read the full narrative on General Dynamics (it's free!)

General Dynamics' outlook anticipates $55.8 billion in revenue and $5.1 billion in earnings by 2028. This scenario is based on a 3.5% annual revenue growth rate and a $1.0 billion increase in earnings from current earnings of $4.1 billion.

Uncover how General Dynamics' forecasts yield a $333.41 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Private investors in the Simply Wall St Community place General Dynamics’ fair value between US$258.57 and US$383.03, with nine individual estimates. As order growth boosts revenue visibility, opinions remain split on how sustained supply chain risks might shape future outcomes, see what others are forecasting.

Explore 9 other fair value estimates on General Dynamics - why the stock might be worth as much as 20% more than the current price!

Build Your Own General Dynamics Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your General Dynamics research is our analysis highlighting 5 key rewards that could impact your investment decision.
• Our free General Dynamics research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate General Dynamics' overall financial health at a glance.

Seeking Other Investments?

These stocks are moving-our analysis flagged them today. Act fast before the price catches up:

• The latest GPUs need a type of rare earth metal called Dysprosium and there are only 28 companies in the world exploring or producing it. Find the list for free.
• Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.
• The end of cancer? These 26 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

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