Why GE Vernova Stock Soared Today

Key Points

• GE Vernova beat on sales and earnings this morning.

• The power equipment company spun off from General Electric a little more than one year ago.

• GE Vernova is hitting its stride and hitting its numbers, but its valuation looks extreme.

• 10 stocks we like better than Ge Vernova ›

Shares of GE Vernova (NYSE: GEV) stock, the power generation equipment division spun off from General Electric last year, reported powerful earnings this morning, boosting its stock 14.8% through 11:30 a.m. ET.

Analysts forecast GE Vernova would earn $1.50 per share on $8.8 billion in Q2 sales. Instead, the company reported a profit of $1.88, and sales of $9.1 billion.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

GE Vernova Q2 earnings

Given the distortions caused by last year's spinoff, comparing this year's Q2 results and last year's is hard. Still, sales grew 11%, and this suggests the business did well, despite earnings declining 60% and free cash flow falling more than 76% to $194 million.

Management noted it took in $12.4 billion in new orders in the quarter, making for a 1.4 book-to-bill ratio that foreshadows strong sales growth ahead. CEO Scott Strazik claims the company can "continue to accelerate our growth and margin expansion from here."

Is GE Vernova stock a buy?

Strazik raised guidance for revenue, profit margin, and free cash flow expectations for the year. Revenue is now expected to come in close to $37 billion in 2025 with adjusted EBITDA margins between 8% and 9%. Free cash flow, previously predicted between $2 billion and $2.5 billion, could now reach from $3 billion to $3.5 billion, says management -- potentially 30% better than the company's $2.7 billion trailing FCF number.

Still, at the low end of guidance this would value the stock at close to 50 times FCF -- and nearly 43 times even at the high end of guidance. Even with 30% growth, that's kind of a stretch. I realize I'm in the minority today, but I won't be buying GE Vernova stock at these kinds of prices.

Should you invest $1,000 in Ge Vernova right now?

Before you buy stock in Ge Vernova, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ge Vernova wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,023,813!*

Now, it’s worth noting Stock Advisor’s total average return is 1,034% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Ge Vernova. The Motley Fool has a disclosure policy.