GE Vernova (GEV) posted 24Q4 revenues of $10.6 billion, up 5%, with growth in both equipment and services. Operating income more than doubled from $195 million to $593 million, as did net income from $205 million to $484 million. GAAP EPS likewise surged from $0.72 to $1.72. The company does not provide a non-GAAP EPS metric. 24Q4 results fell short of my estimates, across the board.
Power business revenues were $5.4 billion, down 3% YOY, but up 2% organically. Orders jumped 24% to $6.6 billion. Segment EBITDA rose 1.4% to $799 million, with EBITDA margin up 60 bp to 14.9%. Wind revenues jumped 20% to $3.1 billion. Wind orders, however, plunged 41% to $2.0 billion, due to the non-repeat of a large order from 23Q4. Segment EBITDA improved from a loss of $289 million to a profit of $19 million. Electrification revenues rose 11% to $2.2 billion. Orders more than doubled to $4.8 billion from $2.2 billion. Segment EBITDA surged 68.5% to $283 million, with margin up 440 bp to 13.0%.
For all of 2024, GEV booked 20 gigawatts (GW) of Gas Power orders, twice the 2023 total, and obtained slot reservations for 9 GW which it expects to convert to orders over the next two years. Demand is being driven by data center hyperscalers for AI processing capacity. To meet it, GEV expects to ramp up annual production to 70-80 heavy-duty gas turbines, from 48 in 2024. It expects to ship 20 GW of turbine generating capacity annually by 2027 and remain at that level going forward. Besides the Gas Power business, GEV has excellent growth potential in small modular nuclear reactors which should begin to ramp by the end of the decade. It is also developing the capacity for its turbines to burn hydrogen.
In Wind, GEV made progress on its turnaround of the business in 2024, scaling back its operating losses. Onshore is profitable; offshore is not. U.S. demand in onshore is uncertain, given the Trump administration’s efforts to remove tax incentives for renewable energy. The company is working down its backlog of unprofitable offshore projects, fixing blade problems at its high profile Vineyard Wind project. It probably will not venture back into offshore until it sees a clear path to profitability. The strong, broad-based demand that Electrification is seeing for upgrading electrical grids worldwide is likely to continue.
Prospects look promising for GEV’s businesses, but my concern is valuation. At the current price of $374.12, GEV is valued at 56 times projected 2025 GAAP EPS of $6.65. If management’s sales expectations prove true, there is still upside potential on the stock, but its current valuation implies that the elevated demand from hyperscalers is virtually certain and that it will last forever. GEV’s high share price leaves little room for error, in my opinion, and makes the stock more vulnerable to the downside risks that may emerge as the artificial intelligence market develops. I am raising my price target from $196 to $250, based upon higher projected earnings, but I am also maintaining my sell rating, since the new price target is 33% below the current quote. The new price target also represents the low end of the range for a potential correction in GEV’s share price, based upon Fibonacci retracement analysis.
This is a summary of my recent update report on GE Vernova (GEV). To obtain a copy of the report, please reach out to me using the contact information provided below.
March 13, 2025 (Report published on February 19, 2024.)
Stephen P. Percoco
Lark Research
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© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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