GE Vernova Inc. (GEV): what the price requires

At today's price, GE Vernova Inc. (GEV) is priced for today's economics sustained for ~38.0 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/GEV

Headline

FieldValue
TickerGEV
CompanyGE Vernova Inc.
Current price$1046.59/sh
CompositionEquipment revenues 55% / Services revenues 45% / Intersegment revenues 1% / Other revenues and elimination of intersegment revenues -1%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin today2.7%
Must persist for38.0y
Multiple paid293x operating income

Solve inputs: computed at a 13.5% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~4.4 years.

Reconcile: at the x-ray's 9.3% required return this reads ~23 years; the models below use their own rates.

How unusual the bet is: high (limited comparison data)

ReferenceValue
sustained it ~10 years at this level15%
implied end-window share95%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset11.01x4expensive
Earnings4.43x3expensive
Relative4.01x5expensive
Growth1.12x3expensive

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$670.601.56xyesFCF base $7.9B, growth 11% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection
DCF Exit MultipleGrowth$1087.240.96xyesExit EV/EBITDA: 131.3x / 133.3x / 135.3x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$261.244.01xyesP/E 39.6x (blended: static sector reference 18x + trailing (TTM) 142x), scenarios: 32.8x / 39.6x / 46.4x (bear / base = reference held flat / bull), EV/EBITDA 26.4x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$79.7613.12xyesBV/sh $51.18, ROE (TTM) 14.4%, ke 9.3%
Two-Stage Excess ReturnAsset$98.4810.63xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$937.241.12xyesRev $39.4B, growth 11% (input: historical growth; tapered), Terminal P/S: 6.0x / 7.2x / 8.5x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$87.9211.90xyesEPS $7.33, growth 2% (input: historical EPS growth), PEG=70.92 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$20.2551.68xyesNormalized EBIT (3y avg op income, one-time charges added back) $0.82B × (1−7%) / WACC 9.2% → EPV (no growth) (excluded from median)
Residual IncomeAsset$101.4510.32xyesBV $51.18 + 5yr PV of (ROE (TTM) 14.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$91.8611.39xyes√(22.5 × EPS $7.33 × BVPS $51.18) — Graham's conservative floor
EV/EBITDA RelativeRelative$84.8012.34xyesEBITDA $2.16B × sector EV/EBITDA 12.0x
FCF YieldEarnings$288.813.62xyesFCF $7526.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$236.414.43xyesEPS $7.33 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$5.54188.92xyesBV $51.18 × (ROIC 1.0% / WACC 9.2%) (excluded from median)
P/Sales SectorRelative$361.902.89xyesRevenue $39.38B × sector P/S 2.5x
PEG Fair ValueRelative$274.753.81xyesEPS $7.33 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$79.2113.21xyesEPS $7.33 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$2.9b
Net debt / NOPAT (after-tax)3.18x
Net debt / operating income (pre-tax)2.96x
Share count CAGR (buyback)-0.3%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

At $1,109 the stock is valued at roughly 310 times company-wide operating income, a number that only makes sense if power-and-grid growth holds near its self-funding ceiling for close to four decades. That is the single most demanding assumption embedded anywhere in the price.

The valuation methods split cleanly. Asset-based, earnings-power, and peer-multiple models all land far below the price (earnings-power near $20, residual income near $101, peer relative near $261); only the growth-DCF frames reach it (exit-multiple $1,142, discounted future market cap $993). The price is a bet on durable compounding the static frames structurally cannot capture.

The business backs the optimism with hard numbers: Q1 2026 brought $18.3B of orders, backlog of $163B, free cash flow of $4.8B in a single quarter, and raised full-year guidance. The question is not whether demand is real. It is whether four decades of ceiling-rate growth is already paid for.

Bull Case

GE Vernova is a mature company by stage, but it is being priced like an early compounder, and for once the order book gives that framing some footing. This is a business that sells the equipment and services that move and generate electricity, split roughly 55% equipment and 45% services in revenue. The mature label matters for how you read the numbers: trailing operating margin is thin at about 3.9%, and a mature industrial earning 3.9% on revenue would normally screen as a value name, not a growth one. What changes the read is the trajectory. Q1 2026 revenue grew 16% to $9.3B, adjusted EBITDA nearly doubled to $896M, and management raised full-year guidance to $44.5B to $45.5B of revenue at a 12% to 14% EBITDA margin. The thin trailing margin is the starting line of a margin-expansion story, not the steady state.

The demand evidence is unusually concrete. The company booked $18.3B of orders in a single quarter and lifted backlog to $163B, with management now targeting a $200B backlog in 2027, a year earlier than before. Electrification captured $2.4B of data-center equipment orders in the quarter, more than the entire prior year. The 10-K frames the structural driver directly: aging infrastructure and policy shifts "drive the need to update aging infrastructure with new grid integration and automation solutions," and notes that regulations such as renewable mandates and subsidies "can significantly impact the power generation" market (FY2025 10-K, accession 0001996810-26-000015). New 2026 Power equipment pricing is running 10% to 20% above late-2025 levels, which is the lever that turns a 3.9% trailing margin into a low-teens forward one.

Services is the quieter part of the bull case and the more durable one. Nearly half of revenue comes from servicing an installed base that the company spent decades putting in the ground, and the 10-K describes Onshore Wind results improving on "improved pricing on an increased number of units delivered" (accession 0001996810-26-000015). Free cash flow of $4.8B in Q1 alone, exceeding all of 2025, shows the cash conversion that a heavy services mix produces once equipment volume scales. Against the peer cohort, Caterpillar, Eaton, Xylem, and Baker Hughes, GE Vernova is the rare name where the multiple is defended not by a single quarter but by a multi-year backlog the buyer can see and underwrite.

Bear Case

The bear case starts with the variable that has the most leverage over this thesis and the least under management's control: policy. GE Vernova's own 10-K names it plainly, warning that government actions such as "carbon pricing, renewable energy mandates, and subsidies for renewable energy technologies, can significantly impact the power generation" market it serves (FY2025 10-K, accession 0001996810-26-000015). A backlog of $163B is only as good as the subsidies, mandates, and grid-buildout budgets that underwrite the projects in it. The price assumes those tailwinds compound for the better part of four decades. A swing in energy policy, a tariff regime that raises input costs, or a rate environment that makes utility capex more expensive does not just dent a quarter, it reprices the multiyear assumption the stock is built on. At today's price the market is paying about 310 times operating income; there is no margin for that bet to be wrong.

The second problem is the math of what is already priced. The implied path requires company-wide operating growth at its self-funding ceiling for roughly 38 years, and a business that ends up at roughly 88% of its own generously grown addressable market. Only about 15% of comparable fast-growers have sustained anything like that pace for even ten years. Every static valuation lens agrees the price is rich: earnings-power value lands near $20, residual income near $101, the peer-relative frame near $261, and the discounted-future-market-cap model, already a generous forward method, reaches only $993, still short of the $1,109 price (June 27, 2026). When asset value, earnings power, and peer multiples all sit far below the quote and only the most aggressive growth model gets close, the price is not valuing the business, it is valuing a forecast.

The third issue is that the operating base is still thin and lumpy. Trailing operating margin is about 3.9%, and the 10-K shows how working capital can swing hard with volume: it reports current receivables of $(1.9)B "driven by net billings and an increase in supplier advances in order to secure future volume in Power and Electrification" and inventories of $(1.4)B from the same volume push (accession 0001996810-26-000015). Wind remains a source of charges; the filing notes availability shortfalls "that may result in a payment to a customer are recorded as a reduction of revenue" (accession 0001996810-26-000015). A blockbuster $4.8B free-cash-flow quarter driven partly by working capital is not a run rate. If margin expansion stalls below the 12% to 14% guide, or if a Wind or supply-chain charge lands, the gap between a 3.9% reality and a four-decade growth story closes from the wrong direction.

Valuation

Start with what the price assumes rather than what it should be. At $1,109 the stock trades at roughly 310 times company-wide operating income. Inverted at a 13.2% cost of capital, that implies operating growth held at the self-funding ceiling for about 38 years, a path that would make the business roughly 88% of its entire generously-grown addressable market. Each one-percentage-point change in assumed growth moves that implied horizon by about four and a half years, so the bet is sensitive as well as long.

The model X-ray shows why the price is a forecast, not a fact. The valuation methods cluster into families, and they disagree by design. The asset-based frames land lowest: simple excess return near $80, two-stage excess return near $98, residual income near $101, ROIC-justified book value near $6. The earnings-power and peer-multiple frames sit in the middle: earnings-power value near $20, FCF yield near $289, peer relative near $261, EV/EBITDA relative near $85. Only the growth-DCF family reaches the price, and barely: DCF exit-multiple lands at $1,142, discounted future market cap at $993, and DCF perpetual growth at $670. The blended cross-method anchor sits near $180. The honest reading is that almost every way of valuing the present business lands a fraction of the price, and the price is funded entirely by the assumption that future growth makes the static frames obsolete.

The balance sheet does not block the bet, but it does not subsidize it either. Net debt is about $2.9B against trailing operating income of roughly $1.5B, a net-debt-to-operating-income ratio near 1.9 times, manageable for a business throwing off the free cash flow this one reported in Q1. The recent results, $18.3B of orders, $163B backlog, and raised 2026 guidance, are real and material to the forward thesis. They justify paying up for growth. What they do not do is justify paying for four decades of ceiling-rate growth in advance. The reasonable conclusion is that the business is excellent and the entry price already contains most of the excellence.

Catalysts

The most recent catalyst was the Q1 2026 report on April 22, and it was a clear positive. Revenue rose 16% year over year to $9.3B, adjusted EBITDA nearly doubled to $896M at a 9.6% margin, and free cash flow reached $4.8B in the quarter, more than the company generated in all of 2025. Orders hit $18.3B, backlog grew $13B sequentially to $163B, and management raised full-year guidance to $44.5B to $45.5B of revenue, a 12% to 14% adjusted EBITDA margin, and $6.5B to $7.5B of free cash flow. (Sources: The Motley Fool Q1 2026 transcript; Yahoo Finance; ECIKS.org earnings summary.)

The data-center demand signal is the catalyst to watch next. Electrification booked $2.4B of data-center equipment orders in Q1, exceeding the entire prior year, and management pulled forward its $200B backlog target to 2027. New 2026 Power equipment pricing is running 10% to 20% above late-2025 levels, so the next two earnings prints will show whether that pricing converts into the promised margin expansion. The bull and bear cases both turn on the same question: does the order book translate into sustained double-digit EBITDA margins, or does the gap between a 3.9% trailing operating margin and the guided forward margin stay a forecast. Watch the next quarterly report for order durability, pricing realization, and any Wind or supply-chain charges that interrupt the trajectory.

Peer Cohorts (Per Segment, With Filing Citations)

Power (reported)

Wind / Electrification (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive GEV report on boothcheck