What General Electric Company (GE) Investors Need to Know Today

General Electric Company logged a -1.7% change during today's afternoon session, and is now trading at a price of $99.3 per share.

General Electric Company returned gains of 78.6% last year, with its stock price reaching a high of $102.95 and a low of $46.78. Over the same period, the stock outperformed the S&P 500 index by 74.0%. More recently, the company's 50-day average price was $94.08. General Electric Company operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. Based in Boston, MA, the large-cap Technology company has 172,000 full time employees. General Electric Company has offered a 0.3% dividend yield over the last 12 months.

The Company's Revenues Are Declining:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $95,215 $79,619 $74,196 $58,099
Gross Margins 26.4% 24.1% 27.4% 23.8%
Operating Margins 8.3% 2.0% 8.2% 0.5%
Net Margins -5.23% 7.16% -8.79% 0.58%
Net Income (MM) -$4,979 $5,704 -$6,520 $339
Net Interest Income -$4,227,000 -$3,273,000 -$1,876,000 -$1,477,000
Depreciation & Amort. -$5,595,000 -$6,018,000 -$3,009,000 -$2,902,000
Earnings Per Share -$4.99 $4.63 -$6.16 $7.25
EPS Growth n/a 192.79% -233.05% 217.69%
Diluted Shares (MM) 1,091 1,095 1,098 1,090
Free Cash Flow (MM) $2,677 $194 $1,971 $4,742
Capital Expenditures (MM) -$6,095 -$3,403 -$1,361 -$1,174
Net Current Assets (MM) -$108,200 -$127,966 -$90,914 -$95,557
Current Ratio 1.38 1.58 1.28 1.18
Long Term Debt (MM) $68,811 $70,288 $30,824 $20,320
Net Debt / EBITDA 13.43 2.65 -10.11 1.75

General Electric Company has exceptional EPS growth and decent operating margins with a negative growth trend. Additionally, the company's financial statements display generally positive cash flows and healthy leverage. However, the firm suffers from declining revenues and decreasing reinvestment in the business, with slimmer gross margins than its peers. Finally, we note that General Electric Company has just enough current assets to cover current liabilities.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

General Electric Company has a trailing twelve month P/E ratio of 13.0, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $4.01, the company has a forward P/E ratio of 23.5. According to the 12.5% compound average growth rate of General Electric Company's historical and projected earnings per share, the company's PEG ratio is 1.04. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 9.1%. On this basis, the company's PEG ratio is 1.42. This implies that the shares are fairly valued. Additionally, the market is possibly undervaluing General Electric Company in terms of its equity because its P/B ratio is 3.42 whereas the sector average is 6.23. The company's shares are currently trading 815.3% above their Graham number.

Analysts Give General Electric Company an Average Rating of Buy:

The 18 analysts following General Electric Company have set target prices ranging from $84.2 to $120.0 per share, for an average of $106.4 with a buy rating. As of April 2023, the company is trading -11.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

General Electric Company has a very low short interest because 1.5% of the company's shares are sold short. Institutions own 72.8% of the company's shares, and the insider ownership rate stands at 0.2%, suggesting a small amount of insider investors. The largest shareholder is Capital Research Global Investors, whose 9% stake in the company is worth $10,137,993,838.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.