Is GE Vernova’s Growth Priced In After the 74% Rally and Spin-Off News?

• Wondering whether GE Vernova is actually a bargain or if the growth story is already priced in? Let’s dig into the numbers to find out how the stock stacks up right now.
• Shares have climbed an impressive 74.2% over the past year, with year-to-date gains of 70.2%. However, they dipped slightly by 1.4% over the last month, hinting at shifting sentiment.
• Much of this movement tracks news around GE Vernova’s recent spin-off from General Electric, which sent investors scrambling to recalibrate expectations as the company took its place as an independent player in the renewable energy sector. Coverage of new strategic partnerships and strong demand for wind and grid technology has further fueled market interest in the stock.
• Based on Simply Wall St’s approach, GE Vernova scores 1 out of 6 on our valuation checks so far, so there is plenty to unpack regarding where value really lies. Up next, we will break down the key valuation techniques, and at the end, I will highlight an even smarter way to put the numbers in context.

GE Vernova scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: GE Vernova Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model projects a company’s future cash flows and then discounts them back to today’s value. This provides an estimate of what the business is truly worth, based on potential future performance rather than just current profits.

For GE Vernova, the DCF analysis starts with the current Free Cash Flow of $2.54 Billion. Analysts provide forecasts for the next five years, expecting strong growth and projecting Free Cash Flow to reach $8.30 Billion by the end of 2029. Beyond that, further FCF growth is extrapolated, though these estimates come with increased uncertainty.

Based on this two-stage cash flow to equity approach, the DCF model calculates an intrinsic value of $602.36 per share. That is approximately 4.2% higher than GE Vernova’s current share price, suggesting a slight undervaluation.

Although the numbers point to a bargain, a 4% discount is relatively minor in the world of investing. This means the stock appears about fairly priced at the moment, with limited margin for error.

Result: ABOUT RIGHT

GE Vernova is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

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

Approach 2: GE Vernova Price vs Earnings

For established, profitable companies like GE Vernova, the Price-to-Earnings (PE) ratio is one of the most common metrics used by investors to weigh value. This multiple allows for an easy comparison between what the market is willing to pay for each dollar of a company’s earnings, providing a familiar yardstick for judging whether a stock looks overvalued or undervalued.

A "normal" or "fair" PE ratio isn’t set in stone. It should reflect how quickly a company is expected to grow and the risks it faces. Generally, higher growth may justify a higher PE ratio, while greater risk or slower growth could mean a lower one. That is why it is important not just to compare companies on absolute numbers, but to take their unique contexts into account.

GE Vernova currently trades at a PE ratio of 91.9x. For perspective, this is much higher than both the industry average of 30.7x and the average for its peers at 38.0x. On the surface, this high multiple could suggest that the market is anticipating substantial growth or that the shares are expensive relative to near-term profits.

Simply Wall St’s proprietary “Fair Ratio” offers a more nuanced benchmark. Unlike simple peer or industry averages, the Fair Ratio attempts to incorporate the company’s earnings growth, industry trends, margins, market cap, and risk profile. For GE Vernova, the Fair Ratio is 73.8x, which is meaningfully lower than the company’s actual PE today.

Since GE Vernova’s current PE exceeds the Fair Ratio by a wide margin, this approach points to the shares being overvalued relative to expected returns after factoring in growth and risks.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your GE Vernova Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your story behind the numbers. It connects what you believe about a company’s future (its revenue, earnings, and margins) to a financial forecast, and from there, to an actionable fair value for the stock.

Instead of relying only on a single metric or analysts’ targets, Narratives let you apply your own perspective to company forecasts, making investing more personal and relevant. Available right now on the Community page on Simply Wall St’s platform, millions of investors are already using Narratives to compare their fair value with the live share price and quickly spot buy or sell opportunities, all in one place.

The real power of Narratives is how flexible and current they are. They update automatically when new announcements or earnings come in, so your view always reflects the latest realities. For example, one investor might set a bullish Narrative for GE Vernova with a fair value of $760, factoring in strong growth and margin expansion, while another takes a cautious view with a target of $280 due to execution and market risks. Narratives let you see these perspectives side by side, supporting smarter, more confident decisions every time you invest.

Do you think there's more to the story for GE Vernova? Head over to our Community to see what others are saying!

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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