General Electric Company (GE) — Fairly Priced With a Low Growth Profile
General Electric Company shares moved 41.8% over the last 52 weeks, with a high of $100.77 and a low of $46.78. During this time, the stock outperformed the S&P 500 index by 46.0%. As of April 2023, the company's 50-day average price is $90.05. General Electric Company operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. The large-cap Consumer Discretionary company has 172,000 full time employees and is based in Boston, MA. General Electric Company has returned a 0.3% dividend yield over the last 12 months.
Declining Revenues With Decreasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue | $95,215,000 | $79,619,000 | $74,196,000 | $58,100,000 |
| Gross Margins | 26.4% | 24.1% | 27.4% | 23.9% |
| Operating Margins | 8.3% | 2.0% | 8.2% | 0.3% |
| Net Margins | -5.23% | 7.16% | -8.79% | 0.34% |
| Net Income | -$4,979,000 | $5,704,000 | -$6,520,000 | $200,000 |
| Interest Cost | -$4,227,000 | -$3,273,000 | -$1,876,000 | -$1,500,000 |
| Depreciation & Amort. | -$5,595,000 | -$6,018,000 | -$3,009,000 | -$2,900,000 |
| Earnings Per Share | -$4.99 | $4.63 | -$6.16 | $0.53 |
| Diluted Shares | 1,091,000 | 1,095,000 | 1,098,000 | 1,090,280 |
| Free Cash Flow | $2,677,000 | $194,000 | $1,971,000 | $4,700,000 |
| Capital Expenditures | -$6,095,000 | -$3,403,000 | -$1,361,000 | -$1,200,000 |
| Net Current Assets | -$108,200,000 | -$127,966,000 | -$90,914,000 | -$92,000,000 |
| Current Ratio | 1.38 | 1.58 | 1.28 | 1.18 |
| Long Term Debt | $68,811,000 | $70,288,000 | $30,824,000 | $20,300,000 |
| Net Debt / EBITDA | 13.43 | 2.65 | -10.11 | 1.78 |
General Electric Company's Valuation Is in Line With Its Sector Averages:
Compared to the Consumer Discretionary sector's average of 22.33, General Electric Company has a trailing twelve month P/E ratio of 169.9 and, according to its EPS guidance of $3.95, an expected P/E ratio of 22.8. General Electric Company's PEG ratio is 18.69 based on the 9.1% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. However, General Electric Company is possibly undervalued in terms of its book value because its P/B ratio is 3.0 compared to its sector average of 3.12. As of the date of publication, the company's shares are trading 401.8% above their Graham number of $19.95. Despite General Electric Company's elevated earnings multiple, the company's impressive cash flow trend, decent P/B ratio, and reasonable leverage show that, all things considered, the company may be fairly valued.
General Electric Company Has an Average Rating of Buy:
18 analysts are following General Electric Company and have set target prices ranging from $84.0 to $120.0 per share. On average, they have given the company a rating of buy. At the current price of $90.05, GE is trading -12.2% away from its average analyst target price of $102.56 per share, implying an analyst consensus of some upside potential for the stock. The company has a very low short interest since 1.5% of the company's shares are tied to short positions. Institutions own 72.6% of General Electric Company's shares, while the insider ownership rate stands at 0.2%. which is a small amount of insider investors. The company's biggest shareholder is Capital Research Global Investors with a 9% stake in the company worth $10,222,588,030.
