GE

Required knowledge for General Electric Company (GE) Investors

General Electric Company shares fell by -2.1% during the day's afternoon session, and are now trading at a price of $106.34. 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 11.1 and a P/B ratio of 4.04.

General Electric Company's PEG ratio is 1.49, 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:

2018 2019 2020 2021 2022 2023
Revenue (MM) $113,543 $113,543 $58,025 $56,469 $58,100 $62,483
Gross Margins -6% 18% -13% -15% -3% 0%
Operating Margins -18.0% 0.0% -11.0% -9.0% -1.0% 15.0%
Net Margins 0.0% 0.0% 10.0% 0.0% 1.0% 16.0%
Net Income (MM) -$89 $66 $5,704 -$71 $407 $9,899
Net Interest Expense (MM) $2,321 $2,479 -$948 $2,696 $1,172 $9,123
Depreciation & Amort. (MM) $5,562 $2,018 $1,895 $3,645 $1,338 $1,500
Earnings Per Share -$2.62 -$4.99 $4.64 -$6.0 $0.05 $8.67
Diluted Shares (MM) 8,691 1,091 1,094 1,098 1,096 1,092
Free Cash Flow (MM) -$13,947 -$3,359 -$17,407 -$22,341 -$4,975 -$6,301
Capital Expenditures (MM) $18,925 $12,197 $20,818 $25,822 $10,891 $12,438
Net Current Assets (MM) -$145,781 -$141,686 -$134,285 -$112,143 -$95,554 -$70,425
Long Term Debt (MM) $225,843 $218,525 $142,580 $109,139 $87,453 $68,879
Net Debt / EBITDA -13.17 103.63 -28.3 -89.47 155.9 6.84

General Electric Company suffers from declining revenues and decreasing reinvestment in the business, slimmer gross margins than its peers, and consistently negative margins with a positive growth rate. The firm's financial statements also exhibit an unconvincing cash flow history and a highly leveraged balance sheet. On the other hand, the company has a strong EPS growth trend working in its favor.

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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