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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. Fair value range: low $249, high $459, with mid-point at $354.
Stock analysis

GD fair value $249–$459

By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-13Next update: 2026-08-13Methodology v2.5Review: automatedArchetype: Mature compounder
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Last price
$346.46
▲ +7.16 (+2.07%)
Fair value
$354
$249–$459
Rating
Hold
confidence 88/100
Upside
+2.1%
upside to fair value
Margin of Safety
$300.58
MoS level · 15%
Market Cap
$93.7B
P/E fwd 19.1

§1 Executive summary

  • Composite fair value $354 with high case $459.
  • Implied upside of 2.1% to fair value.
  • Moat 9/10 · confidence 88/100 · Mature compounder.
  • Trades close to fair value, so the margin of safety is limited either way.
Fair value
$354
Margin of safety
+2.0%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$346.46Price
Low $249.18
Mid $353.62
High $458.52

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.

  • Intangible Assets via entrenched U
    Intangible Assets via entrenched U.S. Defense contracts
  • Switching Costs embedded in long-cycle
    Switching Costs embedded in long-cycle nuclear submarine platforms
  • Cycle upside
    Expanding global defense budgets and elevated corporate jet demand drive sustained margin expansion and robust top-line growth.

§2 Bear case

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.

Ways this thesis can break

Submarine Program Descoping

· Low

Cancellation or significant descoping of major nuclear submarine programs structurally impairs long-term backlog and visibility.

FV impact
-20%
Trigger
3-5 Years

Gulfstream Margin Collapse

· Medium

Operating margins compress below 10% despite revenue growth due to unmitigated supply chain costs and intense pricing pressure.

FV impact
-15%
Trigger
1-2 Years

Multiple De-rating

· Medium

Market premium evaporates, dropping terminal P/E from 19x to 14x as the 'defense premium' normalizes to historical averages.

FV impact
-25%
Trigger
1-3 Years
Early-warning signals to monitor
MetricCurrentTrigger threshold
Consolidated operating margin structurally falling below 10.0%.MonitorDeterioration versus the report thesis
Gulfstream book-to-bill ratio dropping below 1.0x for consecutive quarters.MonitorDeterioration versus the report thesis
Significant execution delays in Columbia-class submarine deliveries.MonitorDeterioration versus the report thesis
OCF to Net Income ratio persistently dipping below 1.0x.MonitorDeterioration versus the report thesis
U.S. defense budget cuts explicitly targeting naval modernization.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-12-312023-12-312024-12-312025-12-31Trend
Revenue$39.41B$42.27B$47.72B$52.55B+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$3.78B$4.21B+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%

Quality scores

OCF / Net income
1.22×
>1 indicates high earnings quality
Accounting quality gate
Fail
Sector-adjusted gate
ROIC
12.3%
Return on invested capital
§3

Numbers analysis

Cash flow

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

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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SCENARIOS FAQ

GD scenarios questions

  1. Each scenario for GD (GD) carries a five-year price target, an explicit set of assumptions (growth, terminal multiple, margin path), and a probability weight calibrated against current visibility.

FAQ

GD — frequently asked questions

  1. Based on our latest analysis, GD trades close to fair value. The current price is $346 versus a composite fair-value midpoint of $354 (range $249–$459), which implies roughly 2.1% upside to the midpoint.

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