GE Vernova stock price has had a strong performance after its public market debut in March last year. It has jumped from around $100 to $625, bringing its market capitalization to over $170 billion. So, will the stock continue rising after the company boosted its dividend and guidance?
GE Vernova boosted its guidance, dividends, and buybacks
GE Vernova, a company that was once a laggard in the energy industry, has become one of the top firms today, helped by the soaring demand for its energy solutions.
The company is doing so well that the management has continued to boost its forward guidance. This growth happened as demand for energy soared in the United States and other countries because of the ongoing AI boom.
GE Vernova delivered a highly optimistic tone in its investor day on Tuesday. The management now expects that its revenue will jump to $52 billion in 2028, up from the previous estimate of $48 billion. These are huge numbers considering that the company made over $34 billion in 2024.
GEV has already signed 18 GW of gas turbine contracts in the current quarter, and the management sees the number reaching 80 GW by the end of the year. Cumulatively, its backlog is expected to grow from the current $135 billion to $200 billion in 2028.
Thanks to these numbers, the management decided to generate $22 billion in free cash flow through 2028. As a result, the management decided to boost its dividend to $0.50 from the previous $0.25. It also increased its share repurchase program from the current $6 billion to $10 billion.
GEV expects that most of its business will continue growing in the coming years. For example, its power segment will have an organic growth rate of between 6% and 7%, a figure that will grow to between 16% and 18% in 2026.
Meanwhile, the electrification segment is expected to have an organic revenue growth of 25% this year, followed by 20% in 2026.
The only blemish in its operations is its wind business, which is expected to continue having negative organic growth metrics in the next few years.
Valuation concerns remain
While GE Vernova’s business is doing well, there are lingering concerns about its valuation, which has become higher than other blue-chip technology companies like Nvidia and AMD.
GEV has a forward P/E ratio of 89, much higher than the sector median of 20. In contrast, Nvidia, a company that has superior growth and margins has a forward P/E ratio of 39. Similarly, Micron, another fast-growing company, has a forward P/E ratio of 14.30.
The rule-of-40 metric, which is mostly applied in software companies, also shows that the company is highly overvalued. Its net income margin is around 5%, while its revenue growth is ~10%, giving it a figure of below 20%.
Meanwhile, the stock is below the analysts’ forecasts. Data compiled by MarketBeat shows that the consensus estimate is $616, which is slightly below the current $625. This means that the risk-reward is fairly muted based on the fundamentals.
GE Vernova stock price technical analysis
The daily timeframe chart shows that the GEV stock price has rebounded from a low of $252 in April to the current $625.
It has recently formed a descending channel and is now hovering near its top. The stock has also moved slightly above the 50-day Exponential Moving Average (EMA).
This descending channel is part of the bullish flag pattern, one of the most popular continuation signs in technical analysis. Therefore, the stock will likely rebound and retest its all-time high as investors wait for the upgraded dividend. A move above that level will point to more gains, potentially to $700.
