Education
About Us
Working with TipRanks
Follow Us
General Dynamics (GD)
NYSE:GD
Top Page
General Dynamics
(NYSE:GD)75Outperform
Positive Factors
Combat Sales Performance
Combat Systems sales of $2.4bn came in 10% above consensus and 9% above BTIG estimates.
Defense Demand
Strong defense demand offsets Aero weakness.
Submarine Support
Rearmament priorities are expected to drive sales at Combat, while Naval support of the Virginia- and Columbia-class submarines boosts Marine.
Negative Factors
Margin Outlook
Initial margin outlook across the segments was below prior consensus and BTIG estimates.
Marine Systems Challenges
Marine Systems margin weakness driven by delays and quality control issues in the naval supply chain.
Regulatory and Supply Chain Issues
Regulatory and supply chain hurdles continue to slow Gulfstream growth.
General Dynamics (GD) vs. S&P 500 (SPY)
Market Cap
$68.68B
Dividend Yield2.23%
Average Volume (3M)1.83M
Price to Earnings (P/E)18.6
Beta (1Y)0.52
Revenue Growth12.88%
EPS Growth13.78%
CountryUS
Employees117,000
SectorIndustrials
Sector Strength66
IndustryAerospace & Defense
Share Statistics
EPS (TTM)13.63
Shares Outstanding270,350,800
10 Day Avg. Volume1,721,487
30 Day Avg. Volume1,832,289
Financial Highlights & Ratios
PEG Ratio1.35
Price to Book (P/B)N/A
Price to Sales (P/S)1.44
Price to Cash Flow (P/CF)8.00
P/FCF Ratio7.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$288.25Price Target Upside14.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
General Dynamics Business Overview & Revenue Model
Company DescriptionVirginia-based General Dynamics Corp. is an aerospace and defense company. The company provides the world's most technologically advanced business jets, wheeled combat vehicles, command and control systems and nuclear submarines. It operates through five business groups: Aerospace, Combat Systems, Information Technology, Mission Systems and Marine Systems.
How the Company Makes MoneyGeneral Dynamics makes money through a diversified revenue model that encompasses multiple key streams across its business segments. The Aerospace segment generates revenue primarily from the sale of Gulfstream business jets and associated aviation services. In the Marine Systems segment, the company earns income by designing and building nuclear-powered submarines and surface combatants for the U.S. Navy. The Combat Systems segment contributes to revenue through the manufacture and supply of combat vehicles, weapons systems, and ammunition to military clients. Lastly, the Technologies segment focuses on generating income by providing IT and mission support services, including communication and information technology solutions, to government and commercial customers. Significant partnerships with the U.S. Department of Defense and other international defense agencies play a critical role in the company's earnings, alongside long-term contracts and a strong backlog of orders.
General Dynamics Financial Statement Overview
Summary
General Dynamics is performing well with strong revenue growth and profitability. The balance sheet reflects a stable financial position with a manageable debt level. Cash flow remains strong, though monitoring free cash flow trends is advisable. Overall, the company's financials indicate a solid position in the Aerospace & Defense industry.Income Statement
General Dynamics has shown consistent revenue growth over the past years, with a notable increase from $42.27 billion to $47.72 billion in the latest year, reflecting a revenue growth rate of 12.88%. The Gross Profit Margin is strong at 100%, indicating effective cost management. Net Profit Margin increased to 7.92%, showing improved profitability. EBIT and EBITDA margins are also robust, supporting overall financial health.87
Very Positive
Balance Sheet
The Debt-to-Equity Ratio has improved over recent years, dropping to 0.40, suggesting better leverage management. With an Equity Ratio of 39.48%, the company shows a stable financial structure. However, the Return on Equity (ROE) is slightly lower at 17.14%, which could be improved for higher shareholder value.75
Positive
Cash Flow
Operating Cash Flow remains strong, although it decreased slightly to $4.11 billion. Free Cash Flow to Net Income Ratio is healthy, indicating good cash generation relative to net income. The Free Cash Flow Growth Rate is negative, reflecting a decline from previous periods, which requires attention to maintain liquidity.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 47.72B | 42.27B | 39.41B | 38.47B | 37.92B | Gross Profit |
| 7.36B | 6.67B | 6.62B | 6.41B | 6.33B | EBIT |
| 4.80B | 4.25B | 4.21B | 4.16B | 4.13B | EBITDA |
| 5.82B | 5.25B | 5.31B | 5.19B | 5.11B | Net Income Common Stockholders |
| 3.78B | 3.31B | 3.39B | 3.26B | 3.17B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.70B | 1.91B | 1.24B | 1.60B | 2.82B | Total Assets |
| 55.88B | 54.81B | 51.59B | 50.07B | 51.31B | Total Debt |
| 10.68B | 11.08B | 10.50B | 11.49B | 13.00B | Net Debt |
| 8.98B | 9.17B | 9.25B | 9.89B | 10.17B | Total Liabilities |
| 33.82B | 33.51B | 33.02B | 32.43B | 35.65B | Stockholders Equity |
| 22.06B | 21.30B | 18.57B | 17.64B | 15.66B |
| Cash Flow | Free Cash Flow | |||
| 3.20B | 3.81B | 3.46B | 3.38B | 2.89B | Operating Cash Flow |
| 4.11B | 4.71B | 4.58B | 4.27B | 3.86B | Investing Cash Flow |
| -953.00M | -941.00M | -1.49B | -882.00M | -974.00M | Financing Cash Flow |
| -3.37B | -3.09B | -3.47B | -4.59B | -903.00M |
General Dynamics Technical Analysis
Negative
250.80
Price Trends
257.67
Negative
273.45
Negative
282.50
Negative
Market Momentum
-2.40
Negative
46.45
Neutral
76.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GD, the sentiment is Negative. The current price of 250.8 is above the 20-day moving average (MA) of 250.48, below the 50-day MA of 257.67, and below the 200-day MA of 282.50, indicating a neutral trend. The MACD of -2.40 indicates Negative momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 76.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GD.
General Dynamics Risk Analysis
General Dynamics disclosed 14 risk factors in its most recent earnings report. General Dynamics reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
General Dynamics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $67.14B | 16.37 | 27.30% | 1.70% | 4.44% | 110.33% | |
75 Outperform | $68.68B | 18.64 | 17.14% | 2.23% | 12.88% | 13.78% | |
74 Outperform | $105.65B | 20.12 | 84.26% | 2.82% | 5.14% | -19.14% | |
71 Outperform | $38.81B | 26.17 | 7.70% | 2.23% | 9.82% | 22.33% | |
67 Neutral | $1.58B | 405.90 | 0.78% | ― | 12.04% | ― | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
50 Neutral | $130.99B | ― | -162.23% | ― | -14.49% | -399.90% |
* Industrials Sector Average
Performance Comparison
GD
General Dynamics
250.80
-17.38
-6.48%
BA
Boeing
158.90
-42.24
-21.00%
LHX
L3Harris Technologies
207.08
-2.47
-1.18%
LMT
Lockheed Martin
448.82
27.88
6.62%
NOC
Northrop Grumman
463.83
13.32
2.96%
GDYN
Grid Dynamics Holdings
19.23
6.71
53.59%
General Dynamics Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -4.48% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong revenue growth across most segments, particularly Aerospace and Marine Systems. However, challenges in G700 deliveries and supply chain issues in Marine Systems posed significant concerns. Overall, while growth was evident, operational challenges created a mixed outlook.Highlights
Revenue Growth
General Dynamics reported a 10.4% increase in revenue to $11.67 billion, driven by strong performance in the Aerospace (22% increase) and Marine Systems (20% increase) segments.
Strong Aerospace Performance
Aerospace revenue increased by 22% year-over-year, despite challenges with G700 deliveries, indicating robust demand and operational strength.
Marine Systems Growth
Marine Systems reported a 20% increase in revenue, driven by Columbia class and Virginia class volumes, continuing a trend of impressive growth.
Combat Systems Order Activity
Combat Systems achieved a book-to-bill ratio of 1.5:1, with significant orders in munitions and defense vehicles, reflecting strong demand.
Backlog and Cash Performance
The company ended the quarter with a backlog of $92.6 billion and a record total estimated contract value of $137.6 billion. Operating cash flow was $1.4 billion, with free cash flow at $1.2 billion.
Lowlights
G700 Delivery Challenges
Delivery of G700 aircraft was significantly below expectations due to engine certification delays, supply chain issues, and repainting needs.
Marine Systems Supply Chain Issues
Ongoing supply chain challenges in the Marine Systems segment are affecting cost and schedule, with no rapid improvement expected.
Aerospace Margin Pressure
Aerospace operating margin was 12.3%, down 90 basis points from the previous year due to supply chain inefficiencies and delivery challenges.
Reduced G700 Delivery Forecast
The forecast for G700 deliveries in 2024 was revised down from 50-52 to about 42, impacting revenue expectations.
Company Guidance
In the third quarter of 2024, General Dynamics provided detailed guidance on key metrics, highlighting robust financial performance across several segments despite some challenges. The company reported earnings of $3.35 per diluted share on revenue of $11.67 billion, with operating earnings reaching $1.18 billion and net income of $930 million. This represented a notable 10.4% year-over-year revenue increase, driven by a 22% increase in the Aerospace segment and a 20% rise in Marine Systems. Year-to-date, revenue was $34.4 billion, up 12.3%, with operating earnings climbing 14.1% to $3.37 billion. However, challenges in delivering the G700 aircraft impacted earnings per share, as only four were delivered against expectations. The company expects to deliver 42 G700s for the year, with a significant 27 anticipated in the fourth quarter. Despite these hurdles, the Aerospace segment achieved a 22% revenue increase with an operating margin of 12.3%. The Combat Systems segment maintained steady revenue at $2.2 billion with earnings up 8.3%, while Marine Systems' revenue surged 20% to $3.6 billion. The Technologies segment also showed strong performance with a 2% revenue increase and a 3.5% rise in operating earnings. The company anticipates total annual revenue of around $48 billion with a 10.3% margin, providing EPS guidance of approximately $14 per share.General Dynamics Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
General Dynamics Extends Consulting Agreement with Former VP
Positive
Dec 16, 2024
General Dynamics has extended its consulting agreement with former Executive Vice President Mark C. Roualet, allowing him to continue providing advisory services until June 30, 2025, with no changes to his monthly payment of $36,500. This extension signifies the company’s ongoing reliance on his expertise in combat systems, potentially impacting its strategic operations and stakeholder relations positively.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.