DCF Studio

    GEV · NYQ · Industrials

    GE Vernova Inc.

    Also onConsensus Drift

    Implied value per share

    USD 63.88

    Market price

    USD 940.33

    Implied upside

    -93.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis model values the shares at 6.8% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.

    Current EV/EBITDA of 108.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 63.88-93.2%
    Exit multiple
    USD 111.27-88.2%
    Market price
    USD 940.33

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 41.4bnUSD 45.0bnUSD 48.9bnUSD 53.1bnUSD 57.7bn+8.7%
    EBITUSD -775.3mUSD -842.6mUSD -915.7mUSD -995.2mUSD -1.1bn-8.7%
    NOPATUSD -612.5mUSD -665.6mUSD -723.4mUSD -786.2mUSD -854.5m-8.7%
    Add depreciation & amortisationUSD 1.5bnUSD 1.6bnUSD 1.8bnUSD 1.9bnUSD 2.1bn+8.7%
    Less capital expenditureUSD -1.0bnUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.4bn+8.7%
    Less increase in working capitalUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 3.0bn-8.7%
    Free cashflow to firmUSD 2.1bnUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.9bn+8.7%
    Discount factor0.95190.86260.78170.70830.6419-
    Present valueUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.9bnUSD 1.8bn-1.5%
    Present Value Of The ForecastUSD 9.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.978Reported 0.967, pulled toward 1.0 (Blume)
    Cost of equity10.38%Risk-free + beta x equity risk premium
    Cost of debt7.00%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 250.4bn99.5% of capital
    Total debtUSD 1.2bn0.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.35%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 63.88

    0% of EV

    Terminal value, undiscounted
    USD 0.00
    Terminal value, discounted
    USD 0.00
    Enterprise value
    USD 9.5bn
    Less net debt
    USD -8.1bn
    Equity value
    USD 17.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 111.27

    58% of EV

    Terminal value, undiscounted
    USD 20.4bn
    Terminal value, discounted
    USD 13.1bn
    Enterprise value
    USD 22.6bn
    Less net debt
    USD -8.1bn
    Equity value
    USD 30.7bn

    Spread between methods: 54%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.35%65.4865.4865.4865.4865.48
    9.35%64.6764.6764.6764.6764.67
    10.35%63.8863.8863.8863.8863.88
    11.35%63.1363.1363.1363.1363.13
    12.35%62.4062.4062.4062.4062.40

    Outlined: this model. Green text: above today's price of 940.33. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year8.7%72.2%+63.5pp
    EBIT margin-1.9%53.3%+55.2pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.