GE Vernova: Valuation Down & Fundamentals Up—A Recipe for Success
GE Vernova (NYSE: GEV) has been electrifying the world and the stock market in 2025. Shares are up nearly 80% year-to-date. GEV’s accelerating growth and increased demand for power generation and transmission solutions have driven this as artificial intelligence (AI) proliferates. However, the industrial company’s shares have dropped significantly in recent months, raising questions about whether the stock is hitting a wall.
Luckily, investors just got new and important data for evaluating the stock’s future. GE released its Q3 2025 earnings on Oct. 22 and received a rash of price target updates the next day. Below, we’ll detail the company’s latest results and provide an updated outlook for investors.
Fortunately, several indicators point to the potential of a renewed rally in GEV.
GEV Blasts Past Revenue Expectations, Announces Acquisition
In Q3, GE Vernova posted revenue of just under $10 billion. This beat analyst expectations by over $800 million and equated to a growth rate of 11.8%. This marked the company’s fastest growth in the past seven quarters and surpassed expectations of 2.6%. However, the firm missed earnings per share (EPS), which came in at $1.64, around 8 cents below forecasts.
Still, the company saw its orders boom, increasing by 55% to $14.6 billion. GE Vernova is now sitting on a $135 billion backlog. With orders much higher than revenue, demand for the company’s services is robust. Additionally, its large backlog provides significant revenue visibility over the coming years.
The firm’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin also improved, rising 600 basis points from a year ago to 8.1%. GEV also announced the acquisition of 50% of its Prolec GE joint venture. This will allow GEV to participate more in the North American power grid market. Prolec previously had exclusive rights to sell transformers in North America. After buying the remaining stake, GEV can now do so.
This is key as the firm expects the North American electrification market to grow by around 10% annually through 2030. Furthermore, Prolec’s EBITDA margin is around 25%, meaning that the acquisition should lift GEV’s margin profile.
Despite the EPS miss, GEV performed very well overall. Additionally, the Prolec acquisition signals confidence in GEV’s North American growth prospects, its most important geographic region.
Fundamental Support for GEV Shares Is Improving
The source of GE Vernova’s recent decline shows why the stock now looks set up much better for future gains. Since hitting an all-time high of just over $664 in early August, shares are currently down around 10%. However, the stock’s decline has come solely from multiple compressions, not deteriorating fundamentals.
Over that same period, GE Vernova’s forward price-to-earnings (P/E) ratio has declined from around 66x to 54x. That’s an 18% drop, much larger than the drop in shares. Earnings forecasts increased significantly over that time, partially offsetting the lower multiple. Thus, analysts believe the company will grow more earnings than previously, despite shares retreating.
The drop in GEV’s trailing P/E ratio is even more striking. It declined from 160x to 97x, a massive 40% fall. The trailing P/E ratio looks at the company’s reported financials, not analyst forecasts. The decline shows that GEV’s earnings have improved dramatically, even though shares are down.
The large 18% and 40% drops compared to a modest 10% decline in shares are key to the stock’s outlook. They indicate that GEV’s valuation is now supported more by actual and expected earnings growth, and less by optimistic sentiment. With vastly improved fundamentals underpinning a lower share price, the stock now looks much better positioned to perform well in the future.
Wall Street Signals 15% Upside Potential
Wall Street appears to be growing more bullish on GEV as well. Among analysts who updated their GEV price targets after Oct. 22, the average target moved up by 1.4%. This suggests that analysts generally became bullish on GEV shares, despite the earnings miss.
Additionally, the average price target among these updates was $688. This figure implies approximately 15% upside potential.
It contrasts significantly with the MarketBeat consensus price target of around $607, which implies just 2% upside. This is another bullish indicator, demonstrating that analysts incorporating the latest information tend to have a more optimistic outlook.
Overall, GEV’s improving fundamentals and falling valuation provide key evidence that shares are now reasonably set up to win in the long term.
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