GE Aerospace Fundamental Analysis (NYSE: GE)
GE Aerospace (NYSE: GE) shows moderate financial fundamentals with a PE ratio of 44.66, profit margin of 17.70%, and ROE of 49.03%. The company generates $50.6B in annual revenue with strong year-over-year growth of 18.48%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 71.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze GE's fundamental strength across five key dimensions:
Efficiency Score
WeakGE struggles to generate sufficient returns from assets.
Valuation Score
WeakGE trades at a premium to fair value.
Growth Score
ExcellentGE delivers strong and consistent growth momentum.
Financial Health Score
WeakGE carries high financial risk with limited liquidity.
Profitability Score
ExcellentGE achieves industry-leading margins.
Key Financial Metrics
Is GE Expensive or Cheap?
P/E Ratio
GE trades at 44.66 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, GE's PEG of 2.50 indicates potential overvaluation.
Price to Book
The market values GE Aerospace at 22.42 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 31.54 times EBITDA. This signals the market has high growth expectations.
How Well Does GE Make Money?
Net Profit Margin
For every $100 in sales, GE Aerospace keeps $17.70 as profit after all expenses.
Operating Margin
Core operations generate 20.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $49.03 in profit for every $100 of shareholder equity.
ROA
GE Aerospace generates $7.03 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
GE Aerospace generates limited operating cash flow of $4.99B, signaling weaker underlying cash strength.
Free Cash Flow
GE Aerospace produces free cash flow of $3.58B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.45 in free cash annually.
FCF Yield
GE converts 0.91% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
44.66
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.50
vs 25 benchmark
P/B Ratio
Price to book value ratio
22.42
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.79
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.09
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.98
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.49
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How GE Stacks Against Its Sector Peers
| Metric | GE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 44.66 | 31.41 | Worse (Expensive) |
| ROE | 49.03% | 1114.00% | Weak |
| Net Margin | 17.70% | -21308.00% (disorted) | Strong |
| Debt/Equity | 1.09 | 0.49 | Weak (High Leverage) |
| Current Ratio | 0.98 | 21.99 | Weak Liquidity |
| ROA | 7.03% | -1339931.00% (disorted) | Weak |
GE outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews GE Aerospace's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-38.00%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
56.47%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
143.37%
Industry Style: Cyclical, Value, Infrastructure
High Growth