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GD trades against a final fair-value range of $249.18-$458.52, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
Continuing resolutions in the U.S. defense budget, supply chain bottlenecks, or a severe macroeconomic downturn limiting corporate jet demand compress margins and stunt near-term revenue growthRevenue growthYear-over-year change in revenue, expressed as a percentage. The starting point for any forward-earnings model and the lens through which scale, mix, and pricing power become visible.. Terminal growthTerminal growthThe perpetual growth rate assumed in the Gordon-growth terminal-value calculation. Capped below long-run nominal GDP (typically 2.5–3.0% for developed-market firms). reverts below historical averages.
Cancellation or significant descoping of major nuclear submarine programs structurally impairs long-term backlog and visibility.
Operating margins compress below 10% despite revenue growth due to unmitigated supply chain costs and intense pricing pressure.
Market premium evaporates, dropping terminal P/E from 19x to 14x as the 'defense premium' normalizes to historical averages.
| Line item | 2022-12-31 | 2023-12-31 | 2024-12-31 | 2025-12-31 | Trend |
|---|---|---|---|---|---|
| Revenue | $39.41B | $42.27B+7.3% | $47.72B+12.9% | $52.55B+10.1% | +10.1% |
| Gross profit | $6.62B | $6.67B | $7.36B | $7.95B | +6.3% |
| Operating income | $4.21B | $4.25B | $4.80B | $5.36B | +8.3% |
| Net income | $3.39B | $3.32B-2.1% | $3.78B+13.9% | $4.21B+11.4% | +7.5% |
| EPS (diluted) | $12.19 | $12.02 | $13.63 | $15.45 | +8.2% |
| EBITDA | $5.31B | $5.25B | $5.82B | $6.43B | +6.6% |
| R&D | — | — | — | — | — |
| SG&A | $2.41B | $2.43B | $2.57B | $2.60B | +2.5% |
Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Deterioration versus the report thesis |
| OCF to Net Income ratio persistently dipping below 1.0x. | Monitor | Deterioration versus the report thesis |
| U.S. defense budget cuts explicitly targeting naval modernization. | Monitor | Deterioration versus the report thesis |
