General Dynamics (GD) AI Stock Analysis

• Market Cap: $93.16B
• Dividend Yield: 1.72%
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.56
• Revenue Growth: 11.86%
• EPS Growth: 17.39%
• Country: US
• Employees: 110,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 3.88
• Shares Outstanding: 270,120,450
• 10 Day Avg. Volume: 1,337,675
• 30 Day Avg. Volume: 1,139,248
• PEG Ratio: 1.41
• Price to Book (P/B): 3.31
• Price to Sales (P/S): 1.53
• P/FCF Ratio: 22.88
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 12.34
• Enterprise Value/Ebitda: 15.21
• 1Y Price Target: $386.33
• Price Target Upside: 13.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 80 Outperform
• Price Target: $403.00 ▲(17.88% Upside)

General Dynamics' strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's robust order backlog and cash flow generation support a positive outlook. However, the high valuation and potential short-term technical corrections are risks to consider.

Positive Factors

Revenue Growth

The substantial year-over-year revenue growth indicates strong demand across key segments, supporting long-term business expansion and market position.

Order Backlog

A robust backlog provides revenue visibility and stability, ensuring sustained operations and strategic planning over the coming years.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, allowing for investment in growth initiatives and shareholder returns.

Negative Factors

Technologies Segment Decline

Declining revenue in the Technologies segment may indicate challenges in maintaining competitiveness, potentially affecting future growth in this area.

Supply Chain Challenges

Ongoing supply chain issues can hinder production efficiency and delay project timelines, impacting overall operational performance.

Government Shutdown Concerns

Prolonged government shutdowns can disrupt contract timing and cash flow, posing risks to financial stability and operational continuity.

General Dynamics Business Overview & Revenue Model

Company Description

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment designs, manufactures, and sells business jets; and offers aircraft maintenance and repair, management, charter, aircraft-on-ground support and completion, staffing, and fixed-base operator services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as builds crude oil and product tankers, and container and cargo ships. This segment also provides navy ships maintenance and modernization services; lifecycle support and repair services for navy surface ships; and program management, planning, engineering, and design support services for submarines and surface ships. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, armored vehicles, and armaments. This segment also offers modernization programs, engineering, support, and sustainment services. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; and intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers. This segment also offers cloud computing, artificial intelligence; machine learning; big data analytics; development, security, and operations; software-defined networks; everything-as-a-service; defense enterprise office system solutions; and unmanned undersea vehicle manufacturing and assembly services. General Dynamics Corporation was founded in 1899 and is headquartered in Reston, Virginia.

How the Company Makes Money

General Dynamics generates revenue through several key streams. Primarily, it earns income from government contracts, which constitute a significant portion of its earnings, particularly in the defense sector. The company provides advanced military technologies and systems to the U.S. Department of Defense and allied nations, ensuring a steady flow of contracts. Additionally, GD's Aerospace segment contributes significantly through the sale and service of business jets, capitalizing on both commercial demand and government contracts. The Combat Systems and Marine Systems divisions also provide specialized vehicles and naval systems that are critical for military operations, further enhancing revenue. Strategic partnerships with government entities and other defense contractors are essential for securing long-term contracts, and collaborations in innovative technology development contribute to enhancing its competitive edge and earnings potential.

General Dynamics Financial Statement Overview

Summary

General Dynamics demonstrates strong financial health with consistent revenue growth and profitability. The company has effectively managed its leverage, as seen in the improved debt-to-equity ratio. Cash flow generation is robust, supporting operational and strategic initiatives. However, attention to cost management is necessary to maintain gross profit margins.

Income Statement

General Dynamics has shown consistent revenue growth with a TTM growth rate of 2.46%. The company maintains strong profitability with a net profit margin of 8.18% and an EBIT margin of 10.67%. However, there is a slight decline in gross profit margin from previous years, indicating potential cost pressures.

Balance Sheet

The company has improved its debt-to-equity ratio to 0.33, indicating better leverage management compared to previous years. Return on equity remains strong at 18.27%, showcasing efficient use of equity. However, the equity ratio is not explicitly provided, which limits a complete assessment of asset financing.

Cash Flow

Free cash flow growth is robust at 16.51%, and the free cash flow to net income ratio is healthy at 0.84, indicating strong cash generation relative to net income. The operating cash flow to net income ratio is moderate, suggesting efficient cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	51.51B	47.72B	42.27B	39.41B	38.47B	37.92B
Gross Profit	7.89B	7.36B	6.67B	6.62B	6.41B	6.33B
EBITDA	6.41B	5.82B	5.25B	5.31B	5.19B	5.11B
Net Income	4.21B	3.78B	3.31B	3.39B	3.26B	3.17B
Balance Sheet
Total Assets	57.60B	55.88B	54.81B	51.59B	50.07B	51.31B
Cash, Cash Equivalents and Short-Term Investments	2.52B	1.70B	1.91B	1.24B	1.60B	2.82B
Total Debt	10.19B	10.68B	11.08B	12.11B	13.18B	14.73B
Total Liabilities	33.16B	33.82B	33.51B	33.02B	32.43B	35.65B
Stockholders Equity	24.43B	22.06B	21.30B	18.57B	17.64B	15.66B
Cash Flow
Free Cash Flow	4.81B	3.20B	3.81B	3.46B	3.38B	2.89B
Operating Cash Flow	5.72B	4.11B	4.71B	4.58B	4.27B	3.86B
Investing Cash Flow	-796.00M	-959.00M	-945.00M	-1.49B	-882.00M	-974.00M
Financing Cash Flow	-4.50B	-3.37B	-3.09B	-3.47B	-4.59B	-903.00M

General Dynamics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 341.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GD, the sentiment is Positive. The current price of 341.87 is above the 20-day moving average (MA) of 340.42, above the 50-day MA of 331.89, and above the 200-day MA of 289.61, indicating a bullish trend. The MACD of 3.96 indicates Positive momentum. The RSI at 54.12 is Neutral, neither overbought nor oversold. The STOCH value of 30.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GD.

General Dynamics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	―	$93.16B	22.35	17.78%	1.72%	11.86%	17.39%
NOC	―	$83.27B	20.94	26.15%	1.50%	-0.14%	72.35%
RTX	―	$239.33B	36.65	10.49%	1.47%	8.79%	39.63%
LHX	―	$54.08B	31.04	9.13%	1.65%	2.83%	47.00%
LMT	―	$113.82B	27.46	62.78%	2.68%	2.88%	-35.15%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	―	$152.79B	―	―	―	10.19%	-6.03%

General Dynamics Corporate Events

General Dynamics’ Earnings Call Highlights Robust Growth

General Dynamics’ recent earnings call painted a picture of robust financial health, marked by record revenues and strong order momentum. The company reported impressive growth in its Aerospace and Combat Systems segments, which contributed to significant cash flow generation. However, challenges remain in the Technologies segment, and there are concerns about supply chain constraints and the potential impacts of a government shutdown.