What caught my attention is Is 50 times free cash flow too high a price to pay for this energy stock. S of GE Vernova (GEV 14.
Moreover, Furthermore, 79%) stock, the power generation equipment division spun off from General Electric last year, reported powerful earnings this morning, boosting its stock 14. 8% through 11:30 a.
Analysts forecast GE Vernova would earn $1, considering recent developments. 50 per on $8. 8 billion in Q2 sales. Conversely, Instead, the company reported a fit of $1 (something worth watching).
88, and sales of $9. Image source: Getty Images, in this volatile climate.
GE Vernova Q2 earnings Given the distortions caused by last year's spinoff, comparing this year's Q2 results and last year's is hard.
Still, sales grew 11%, and this suggests the did well, despite earnings declining 60% and free cash flow falling more than 76% to $194 million. Nevertheless, Management noted it took in $12.
4 billion in new orders in the quarter, making for a 1, in this volatile climate. Furthermore, Additionally, 4 book-to-bill ratio that foreshadows strong sales growth ahead.
CEO Scott Strazik claims the company can "continue to accelerate our growth and margin expansion from here, in today's market environment.
Furthermore, " Is GE Vernova stock a buy, in light of current trends. Additionally, Strazik raised guidance for revenue, fit margin, and free cash flow expectations for the year.
Revenue is now expected to come in close to $37 billion in 2025 with adjusted EBITDA margins between 8% and 9%. Conversely, Free cash flow, previously predicted between $2 billion and $2.
On the other hand, 5 billion, could now reach from $3 billion to $3, given the current landscape. However, 5 billion, says management -- potentially 30% better than the company's $2.
Conversely, 7 billion trailing FCF number (this bears monitoring).
Conversely, Still, at the low end of guidance this would value the stock at close to 50 times FCF -- and nearly 43 times even at the high end of guidance.
Even with 30% growth, that's kind of a stretch. I realize I'm in the minority today, but I won't be buying GE Vernova stock at these kinds of prices (which is quite significant).
Nevertheless, The Author Rich Smith is a contributing Defense Analyst at The Motley Fool, covering publicly traded and emerging in defense, space, and aerospace.
Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D, in this volatile climate.
He holds a B. In International Relations from the College of William & Mary in Virginia, a J.
From the University of Baltimore, and language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation.
Conversely, Fun fact: Canada's The Globe and Mail him in an article titled, "Ex-lawyer one of the best stock pickers since 2009, in today's market environment.
Furthermore, " TMFDitty X @RichSmithFool Rich Smith has no position in any of the stocks mentioned (something worth watching). Additionally, The Motley Fool recommends Ge Vernova.
The Motley Fool has a disclosure policy.