Read This to Understand General Electric Company Stock

Today we're going to take a closer look at large-cap Technology company General Electric Company, whose shares are currently trading at $104.69. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

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

General Electric Company operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, General Electric Company has a trailing 12 month P/E ratio of 14.4 and a P/B ratio of 3.6.

General Electric Company's PEG ratio is 1.91, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

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 Expense (MM) -4,227 -3,273 -1,876 -1,477
Net Interest Expense (MM) -$4,227 -$3,273 -$1,876 -$1,477
Depreciation & Amort. (MM) -$5,595 -$6,018 -$3,009 -$2,902
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 and slimmer gross margins than its peers. Finally, we note that General Electric Company has just enough current assets to cover current liabilities.

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.