GE

Quick Report on General Electric Company (GE)

General Electric Company shares fell by -1.1% during the day's evening session, and are now trading at a price of $111.97. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

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 12.1 and a P/B ratio of 3.35.

General Electric Company's PEG ratio is 1.67, 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.

Exceptional EPS Growth Obtained Primarily Through Share Buybacks:

2020-02-24 2021-02-12 2022-02-11 2023-02-10
Revenue (MM) $90,221 $75,834 $74,196 $76,556
Gross Margins 28.1% 23.7% 27.4% 27.5%
Operating Margins 9.2% 0.4% 5.8% 7.8%
Net Margins -5.52% 7.52% -8.79% 0.29%
Net Income (MM) -$4,978 $5,705 -$6,520 $224
Net Interest Expense (MM) -$2,927 -$2,068 -$1,876 -$1,607
Depreciation & Amort. (MM) -$3,541 -$3,464 -$3,009 -$3,544
Earnings Per Share -$3.89 $3.73 -$4.8 $9.23
EPS Growth n/a 195.89% -228.69% 292.29%
Diluted Shares (MM) 1,397 1,403 1,408 1,088
Free Cash Flow (MM) $10,574 $4,942 $4,415 $7,078
Capital Expenditures (MM) -$1,837 -$1,376 -$1,083 -$1,162
Net Current Assets (MM) -$132,221 -$134,285 -$90,913 -$83,973
Current Ratio 1.34 1.55 1.28 1.16
Long Term Debt (MM) $67,241 $70,189 $30,824 $28,593
Net Debt / EBITDA 58.71 3.27 -14.39 3.08

General Electric Company's financial statements include several red flags such as declining revenues and decreasing reinvestment in the business, slimmer gross margins than its peers, and exceptional EPS growth obtained primarily through share buybacks. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company benefits from decent operating margins with a stable trend and consistent free cash flow. Furthermore, 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.

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