Is It Too Late to Consider GE Vernova After Surging 90% in 2025?

If you have been eyeing GE Vernova stock, you are not alone. Investors are buzzing after its recent rally, trying to figure out whether now is the time to buy, hold, or cash in. In just the last week, GE Vernova surged 6.3%, and its year-to-date return sits at a stunning 90.1%. Stretch that out to the past twelve months and you are looking at a 142.4% jump. Numbers like these turn heads and invite tough questions about what's driving the action and what comes next.

Much of this recent enthusiasm is tied to broader market optimism about the renewable energy sector and electric grid modernization, both key areas where GE Vernova is making moves. While short-term rallies can sometimes spark worries of overvaluation or excess hype, these gains have also come as investors reassess the company's long-term role within the fast-evolving energy landscape.

So, does GE Vernova still offer value after its climb, or are we approaching risky territory? On a numeric level, the company's value score comes in at just 1 out of 6 based on common checks for undervaluation, suggesting caution for value-focused buyers. But valuation is rarely just about a simple number. Next, we will walk through the main methods investors use to assess value. Later, I will share an even deeper perspective that might just change how you think about valuation altogether.

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

The Discounted Cash Flow (DCF) model works by estimating how much cash a company will generate in the future and then bringing those cash flows back to today's value using a discount rate. This approach gives investors a sense of what the underlying business is really worth based on its ability to produce free cash flow over time.

For GE Vernova, the latest trailing twelve months free cash flow stands at $2.74 billion. Analysts forecast a significant ramp-up; in five years (by 2029), free cash flow is projected to climb to $8.0 billion. Since analysts typically only provide up to five years of forecasts, projections from 2030 onward are extrapolated.

Using this two-stage DCF method, the estimated fair value for GE Vernova comes out to $619.49 per share. With the stock currently about 4.0% above this intrinsic value, the DCF model signals the shares are slightly overvalued, but not by much.

Result: ABOUT RIGHT

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

Simply Wall St performs a valuation analysis on every stock in the world every day (check out GE Vernova's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: GE Vernova Price vs Sales (P/S)

The Price-to-Sales (P/S) ratio is a commonly used valuation metric for companies like GE Vernova that are rapidly expanding but may not have the stable profitability to justify a focus on earnings multiples. This ratio reflects how much investors are willing to pay per dollar of sales, making it especially useful for high-growth sectors where profit margins are still developing.

A reasonable P/S ratio depends on growth expectations and company-specific risk. High-growth companies often command higher P/S ratios; more mature or riskier firms trade at lower multiples. For context, GE Vernova’s current P/S ratio is 4.79x. This sits above the Electrical industry average of 2.45x and below the average of its most comparable peers at 6.92x.

Simply Wall St's Fair Ratio offers a more tailored benchmark, estimating what would be a sensible P/S multiple for GE Vernova based on its unique blend of earnings potential, growth prospects, profit margin, market cap, and relevant risks. Unlike simple peer or industry comparisons, the Fair Ratio is designed to capture a broader set of drivers and provide a more personalized valuation anchor. For GE Vernova, the calculated Fair Ratio is 3.59x. With its current P/S ratio just moderately higher than this, the stock appears to be roughly in line with its fair value.

Result: ABOUT RIGHT

PS 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 GE Vernova Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce Narratives, a smarter, more dynamic tool for making investment decisions.

A Narrative is simply your story or perspective about a company, showing how you see its journey and future potential beyond just the numbers. With Narratives, you can express your assumptions about GE Vernova’s future revenue, earnings, and margins, connect those beliefs to a tailored financial forecast, and see your resulting fair value right alongside the current market price.

This method takes you beyond rigid formulas, letting you anchor your decisions to what matters most to you, not just what analysts or consensus models say. Narratives are available to every user on the Simply Wall St Community page, making it easy and accessible for anyone, whether you're new to investing or a seasoned pro.

You can update your Narrative as news, earnings, or new projects emerge, so your viewpoint remains flexible and current in a fast-changing market. For example, one investor might believe GE Vernova’s investments in grid modernization and clean energy will rapidly boost earnings, leading to a higher fair value. Another, more cautious investor might be concerned about wind segment losses or project delays and set a much lower price target. Narratives let you quickly compare your story-led fair value to today’s share price, helping you decide when to buy, sell, or hold with confidence.

Do you think there's more to the story for GE Vernova? 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com