GENERAL ELECTRIC CO (GE) Stock Analysis
GENERAL ELECTRIC CO (GE) Stock Analysis
Overall Grade: F (Concerning)
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GENERAL ELECTRIC CO faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -58.8% | Below expectations |
| FCF Margin | 14.7% | Healthy cash flow |
| Debt/Equity | 1.1x | Moderate leverage |
Investment Thesis: Healthy free cash flow margin of 14.7% provides financial flexibility for growth and shareholder returns.
What is GENERAL ELECTRIC CO's Profitability and ROIC?
GENERAL ELECTRIC CO's return on invested capital of -58.8% is below the typical cost of capital. Gross margin of 100.0% with operating margin at 18.8% reflects the company's strong market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -58.8% | Red flag | Below cost of capital |
| Return on Equity (ROE) | 42.1% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 100.0% | Excellent | Strong pricing power |
| Operating Margin | 18.8% | Good | Efficient operations |
How Strong is GENERAL ELECTRIC CO's Cash Flow Quality?
GENERAL ELECTRIC CO generated $6.4B in free cash flow over the trailing twelve months, representing a 14.7% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 14.7% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $6.4B | Good | Positive cash generation |
| OCF/Net Income | 0.9x | Good | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is GENERAL ELECTRIC CO's Financial Health?
GENERAL ELECTRIC CO's debt-to-equity ratio of 1.1x indicates moderate leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 1.1x | Adequate | Moderate leverage |
| Net Cash Position | $-8.3B | Warning | Net debt position |
Is GENERAL ELECTRIC CO Stock Overvalued or Undervalued?
GENERAL ELECTRIC CO trades at a P/E of 39.8x, representing a premium to the sector median of N/A. Free cash flow yield of 2.0% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 39.8x | Adequate | Premium valuation |
| EV/Sales | 5.4x | Adequate | Growth premium priced in |
| FCF Yield | 2.0% | Adequate | Lower cash yield |
| Dividend Yield | 0.5% | Adequate | Growth focus over income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -58.8% | Top 5% | -9.1x below |
| Free Cash Flow Margin | 14.7% | Top 50% | 1.5x above |
| Gross Margin | 100.0% | Top 10% | 1.9x above |
| Operating Margin | 18.8% | Top 25% | 3.0x above |
| Return on Equity (ROE) | 42.1% | Top 10% | 6.8x above |
| P/E Ratio | 39.8x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -58.8% (Red flag - Top 5% of sector (median: 6.5%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 14.7% (Good - Top 50% of sector (median: 10.0%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 100.0% (Excellent - Top 10% of sector (median: 52.9%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 110.8% (Adequate)
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 39.8x (Adequate)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 2.0% (Warning)
Frequently Asked Questions
Q: What is GENERAL ELECTRIC CO's Return on Invested Capital (ROIC)?
GENERAL ELECTRIC CO (GE) has a trailing twelve-month Return on Invested Capital (ROIC) of -58.8%. This compares below the sector median of 6.5%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is GENERAL ELECTRIC CO's Free Cash Flow Margin?
GENERAL ELECTRIC CO (GE) has a free cash flow margin of 14.7%, generating $6.4 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is GENERAL ELECTRIC CO stock overvalued or undervalued?
GENERAL ELECTRIC CO (GE) trades at a P/E ratio of 39.8x, which is above the sector median of N/A. The EV/Sales multiple is 5.4x. Free cash flow yield is 2.0%, reflecting growth expectations priced into the stock.
Q: Does GENERAL ELECTRIC CO pay a dividend?
GENERAL ELECTRIC CO (GE) currently pays a dividend yield of 0.5%. Including share buybacks, the total shareholder yield is 2.7%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does GENERAL ELECTRIC CO have?
GENERAL ELECTRIC CO (GE) has a debt-to-equity ratio of 1.1x with total debt of $20.8 billion. Net debt position is $8.3 billion.
Q: What is GENERAL ELECTRIC CO's revenue and earnings growth?
GENERAL ELECTRIC CO (GE) grew revenue by 17.7% year-over-year. Earnings per share increased by 31.6% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: Is GENERAL ELECTRIC CO buying back stock?
GENERAL ELECTRIC CO (GE) repurchased $7.2 billion of stock over the trailing twelve months. This represents a buyback yield of 2.2%.
Q: How does GENERAL ELECTRIC CO compare to competitors in Technology?
Compared to other companies in Technology, GENERAL ELECTRIC CO (GE) shows: ROIC of -58.8% is below the sector median of 6.5% (Top -291%). FCF margin of 14.7% exceeds the sector median of 10.0% (Top 40% of sector). Gross margin at 100.0% is 47.1 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with GENERAL ELECTRIC CO?
GENERAL ELECTRIC CO (GE) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-21. TTM metrics as of Q3 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.