Does General Electric’s 70% Surge Signal Room for More Growth in 2025?

Thinking about what to do with General Electric stock? You’re not alone. After all, this isn’t the same GE of yesteryear. Investors who have stuck around have already enjoyed a wild five-year journey, with shares up a massive 741.3%. Even just over the past year, GE’s stock has surged 70.7%, and it’s up 80.2% since January. Those impressive numbers have a lot of people wondering if this legacy industrial giant still has room to run, or if it’s time to take some profits off the table.

What’s changed? Alongside the overall market’s renewed appetite for industrial innovation, GE’s recent moves to streamline its sprawling business—such as the finalization of its major breakup into three focused companies and renewed leadership in areas like aerospace—have signaled a true pivot for the company. This restructuring has made Wall Street sit up and take notice and taken much of the uncertainty out of the GE story, reducing what many saw as excessive risk in years past.

Of course, past performance isn’t everything, and savvy investors want to know if the current price actually makes sense. If we look at a standard set of valuation metrics, General Electric doesn’t come out looking like a bargain: it scores 0 out of 6 on undervaluation checks. But valuation is more than just boxes ticked. Next, let’s break down the common approaches to valuing GE, and later I’ll share a smarter angle you won’t want to miss.

General Electric scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: General Electric Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future free cash flows and discounting them back to today, aiming to capture what those future earnings are worth in current dollars. This method is especially useful for evaluating companies with fairly predictable cash generation, such as General Electric’s new, more focused business lines.

For General Electric, the latest trailing twelve-month Free Cash Flow (FCF) stands at approximately $6.45 billion, with analysts projecting steady annual growth over the coming years. Looking out to the end of 2029, forecasts anticipate that FCF will reach about $10.46 billion. Estimates for the years beyond are extrapolated using a reasonable growth rate by Simply Wall St to round out the 10-year projection.

After modeling these growing cash flows and bringing them back to present value, the intrinsic value per share is calculated at $195.44. However, this model also signals that GE’s stock is trading at a 55.5% premium to its estimated fair value. This suggests that the shares are currently overvalued according to this analysis.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for General Electric.

Our Discounted Cash Flow (DCF) analysis suggests General Electric may be overvalued by 55.5%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: General Electric Price vs Earnings (PE)

When analyzing profitable companies like General Electric, the price-to-earnings (PE) ratio is often considered one of the most practical tools for valuation. This metric compares the price of a company's stock relative to its earnings, giving investors insight into how much they are paying for each dollar of future profit. It is particularly useful for established businesses with consistent earnings, as is the case with GE following its recent transformation.

However, deciding what counts as a "normal" or "fair" PE ratio depends on more than just current earnings. It is influenced by the company’s expected growth, overall risk, and how it stacks up against similar companies. A higher PE can be justified if a company is expected to grow faster than average or carries a lower risk profile, while a lower PE may reflect slower growth or higher uncertainty.

General Electric’s current PE ratio is 39.8x, which is right in line with the Aerospace & Defense industry average of 39.6x but significantly higher than its peer group average of 26.9x. To bring more context, Simply Wall St's proprietary "Fair Ratio" for GE is calculated at 34.5x. This Fair Ratio incorporates not only the company's sector and recent growth, but also its profit margins, market cap, and risk factors. This offers a more holistic perspective than a simple peer or sector comparison. In GE’s case, the actual PE is only modestly above the Fair Ratio, suggesting the shares are priced about right when all these nuanced factors are weighed together.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your General Electric Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a concise story or perspective that connects what you believe about a company, how its business might evolve, what its key opportunities and risks are, and where future earnings may land, to your own estimates of future revenue, profit margins, and ultimately, what you think is a fair value for the stock.

With Narratives, you can bridge the gap between the numbers and the real-world trends shaping General Electric, linking your unique outlook to specific financial forecasts and a fair value calculation. Narratives are easy to use and fully accessible right from the Community page on Simply Wall St, where millions of investors submit and update their views, making complex concepts actionable for everyone.

They help guide your buy or sell decisions by directly comparing your fair value to the current price, and they update automatically as new information, like news or earnings reports, emerges so your analysis always reflects the latest developments.

For example, among General Electric investors, some see major upside in GE's rapid aerospace innovation and project a fair value as high as $343 per share, while others are more cautious about supply chain risk or industry cycles, estimating a much lower fair value of $266. Narratives embrace all these viewpoints, letting you choose the one that best fits how you see the company's future.

Do you think there's more to the story for General Electric? Create your own Narrative to let the Community know!

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.

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