GE Vernova (GEV) makes the gas turbines, grid equipment and wind turbines behind a large share of the world’s electricity, and AI data centers have filled its order book for years ahead. The third quarter added $29 billion of orders and raised every 2026 target. This report values the business on the company’s own 2028 targets. The conclusion: an exceptional order book, at a price that already assumes more than those targets.
Today’s close against the report’s numbers, updated every weekday.
The cash-flow model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the Street’s targets. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 20, 2026, and updated on October 29, 2026, the day after third-quarter results. Figures are from GE Vernova’s filings and releases unless noted. Not investment advice. The author holds GEV shares.
GE Vernova is the former energy business of General Electric, spun off as its own company in April 2024. It sells equipment and, more importantly, decades of service on that equipment. Once a gas turbine or a grid substation is installed, it needs parts, upgrades and maintenance for 30 years or more, so every machine sold today is also a long service contract.
Demand changed in 2024 and 2025. Power use in the U.S. had been flat for about fifteen years; AI data centers, factories moving back onshore and the electrification of heating and transport have pushed it up again. Utilities need new gas plants that can run around the clock, and the grid needs transformers and switchgear to connect them. GE Vernova sells both.
Gas turbines, the largest piece, plus steam, hydro and nuclear, including the BWRX-300 small modular reactor. Roughly half of revenue, and most of the profit.
Grid equipment: transformers, switchgear, high-voltage links and the software that runs them. In February 2026 it bought the remaining half of Prolec GE, a transformer maker, for $5.275 billion.
Onshore and offshore turbines. Revenue is shrinking and the segment loses money, held back by U.S. permitting, tariffs and offshore project problems.
In gas turbines, essentially two rivals: Siemens Energy and Mitsubishi Heavy Industries. In grid equipment: Siemens Energy, Hitachi Energy, Schneider Electric and Eaton. In wind: Vestas and Siemens Gamesa.
Takeaway. A three-player market for large gas turbines, sold out for years, with a long tail of service revenue behind every sale. Few industrial businesses have that much visibility.
The backlog is the reason the stock has re-rated. It reached a record $197 billion in September, up $21 billion in one quarter and from $129 billion in mid-2025: $104 billion of equipment and $93 billion of service. Third-quarter orders were $29.3 billion, almost double a year before and more than twice revenue; gas equipment orders were about four times higher. Management expects the backlog to pass $200 billion in the fourth quarter.
In gas turbines GE Vernova counts two kinds of commitment: firm orders and slot reservations, where a customer pays to hold a production slot. Together they rose from 116 GW to 122 GW in the quarter, and firm orders now exceed reservations. The company expects to end 2026 above 130 GW, up from 125 GW. For scale, it plans to build 20 GW a year from the third quarter of 2026, 24 GW in 2028 and 30 GW by 2030, so the factories are effectively sold out for about five years. Management has been taking reservations for 2031.
A sold-out factory sets its own prices. Gas orders taken in the third quarter were priced more than 20% above the fourth-quarter 2025 average, and management expects 2026 orders as a whole to be priced about 50% higher per kilowatt than 2025’s. Those higher prices reach revenue only as the turbines ship, from 2027 onward.
Read. The order book makes revenue for 2027 and 2028 unusually predictable. The open questions are margins and how long the cycle lasts, not demand.
| Segment | Q3 orders | Q3 revenue | Q3 EBITDA margin | 2026 guidance | 2028 target margin |
|---|---|---|---|---|---|
| Power | More than doubled; gas about 4× | +25% | 21.4% | 19–21% organic growth, 19–21% margin (raised) | 22% |
| Electrification | $5.4B, −9% | +51%, +16% organic | 19.1% | $14.5–15.0B revenue, top of 18–20% margin | 22% |
| Wind | +16% | +3% | Profitable, $72M | Loss of $400–500M | 6% |
| Company | $29.3B, +96% | $12.6B, +18% organic | 15.4% | $46.5–47.5B revenue, 13.5–14.5% margin | 20% |
Power is the profit engine. Its margin rose more than 8 points in a year to 21.4% as pricing and volume improved; it shipped 32 gas turbines, 60% more than a year earlier, and management expects it to leave 2026 with a margin in the mid-20s, already above the 22% target for 2028. Electrification grew 16% organically, plus almost $1 billion from Prolec GE; orders dipped only because a year earlier included a $1.6 billion Saudi order, and its equipment backlog is up 60% to $42 billion. In October it agreed to buy Trench Group, a maker of high-voltage grid components, for $9 billion, due to close in late 2027.
Wind is the drag, though it made a small profit in the quarter. The full year is still guided to a $400–500 million loss, and the 2028 plan has its revenue still falling. Because Wind is shrinking while the other two grow, the company margin rises even if nothing else changes.
Read. The 20% company margin target is mostly a mix story: more Power and Electrification at 22%, less Wind.
| FY2022 | FY2023 | FY2024 | FY2025 | TTM Jun 2026 | |
|---|---|---|---|---|---|
| Revenue | $29.7B | $33.2B | $34.9B | $38.1B | $41.4B |
| Gross margin | 11.7% | 14.5% | 17.4% | 19.8% | 20.2% |
| Operating margin (GAAP) | −9.7% | −2.8% | 1.3% | 3.6% | 4.4% |
| Net income | −$2.7B | −$0.4B | $1.6B | $4.9B | $9.5B |
| Operating cash flow | −$0.1B | $1.2B | $2.6B | $5.0B | $14.1B |
| Free cash flow | −$0.6B | $0.4B | $1.7B | $3.7B | $12.4B |
Four years ago this business lost money. Gross margin has since nearly doubled to about 20%, and GAAP operating margin turned positive in 2024. On the company’s adjusted measure, EBITDA margin was 15.4% in the third quarter, up from 11.3% in the second, and it now guides to 13.5 to 14.5% for 2026 (from 12 to 14%) and 20% by 2028.
Reported profit flatters the trend. 2025 net income included a $2.1 billion tax benefit, and the last twelve months include a $4.0 billion gain from revaluing the half of Prolec GE it already owned. Strip those out and earnings are far lower, which is why the headline P/E of about 25 is misleading.
Cash flow also runs ahead of profit, for a better reason: customers pay large deposits to secure turbine slots. Free cash flow was $5.4 billion in the third quarter alone, $5.3 billion of it from working capital, and 2026 guidance is now $16 to $17 billion, up from $11.5 to $12.5 billion. That cash is real, but it is paid in advance for turbines still to be built, so it will slow as deliveries catch up with orders.
Read. Value the business on operating margins, not on this year’s net income or deposit-driven cash flow.
GE Vernova has net cash of about $14 billion, up $4 billion in the quarter as customer deposits came in. The plan is to return at least a third of the cash it generates: it returned $5.7 billion in the first nine months, bought about 2 million shares for $1.6 billion in the third quarter and more than $1.3 billion in October, and in October doubled the buyback authorization to $20 billion. The quarterly dividend is $0.50.
The $9 billion Trench purchase will be paid half in cash and half with about $4.5 billion of new debt, keeping debt below one times EBITDA; it is not in the model until it closes. The company also plans to raise research and capital spending by more than 30% this year, much of it to lift turbine output from 20 to 30 GW a year inside existing factories.
Read. The balance sheet carries no risk to the thesis. The only real question is the price paid for buybacks: shares repurchased near $850 are worth it only if the growth case below plays out.
The model starts from 2026 revenue guidance, follows the company’s 2028 plan, then lets growth fade to 3% by 2036. The base case gives GE Vernova everything it has promised: double-digit growth through 2028 and a 20% EBITDA margin from then on. This update starts from the raised 2026 guidance and September’s larger cash balance; the 2028 targets are unchanged, so the growth path to them is slightly lower.
| Assumption | Base case | Basis |
|---|---|---|
| Revenue, 2026 | $47.0B | Midpoint of the raised guidance, including Prolec GE |
| Growth, 2027 and 2028 | 11%, then 10% | Reaches about $57B in 2028: the $52B target plus Prolec GE |
| Growth after 2028 | Fades to 3% by 2036 | Capacity reaches 30 GW in 2030; the cycle matures |
| Adjusted EBITDA margin | 14% in 2026, 20% from 2028 | The company’s 2028 target, held for good |
| Depreciation | 2.2% of revenue | Rising with the capacity build-out |
| Tax rate | 21% | U.S. statutory rate |
| Reinvestment | $1 for every $4 of new revenue | Capital spending plus working capital |
| Discount rate (WACC) | 10.7% | 5.2% Treasury, beta 1.25, 4.5% equity premium; almost no debt |
| Terminal growth | 3.0% | With a 20% return on new capital |
| Bear | Base | Bull | |
|---|---|---|---|
| Growth, 2027 / 2028 | 7% / 5% | 11% / 10% | 16% / 14% |
| EBITDA margin from 2028 | 16% | 20% | 23% |
| WACC | 11.5% | 10.7% | 9.7% |
| Value per share | $293 | $465 | $715 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25, the three cases give $485 a share. Even the bull case, with faster growth, margins above target and a lower discount rate, reaches $715, still well below the price.
| WACC | 8.5% | 9.0% | 9.5% | 10.0% | 10.7% |
|---|---|---|---|---|---|
| Value per share | $633 | $584 | $543 | $507 | $465 |
Why the automatic model is lower. The Valuation tool sees only reported results, a 4% operating margin, and gives about $230. This report replaces that with the company’s own margin targets. Switching the tool to High growth and setting a 17.5% operating margin gets close to these numbers.
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
Running the model backwards shows what has to be true to justify $878.03. Holding everything else at the base case, the price needs one of these:
| To reach $878, you need | Instead of | How likely |
|---|---|---|
| Revenue growth of about 28% a year in 2027 and 2028 | 11% and 10%, in line with guidance | Capacity limits make it hard: output rises from 20 to 24 GW by 2028 |
| An EBITDA margin near 37% | The 20% target | No large industrial equipment maker runs at that level |
| A discount rate of about 6.9% | 10.7% | Lower than the cost of equity for most utilities |
In practice the market is betting on a mix: higher prices for longer, margins above 20% after 2028, and a power cycle that lasts well into the 2030s. Peer multiples tell the same story. At about $219 billion of enterprise value, the stock trades near 19 times the 2028 EBITDA target and 33 times this year’s, multiples usually reserved for software companies.
The Street is more positive. Before the results, the average of 35 analyst targets was about $1,172, with a range of $470 to $1,450, and most rate it Buy. Their targets rest on earnings well beyond 2028 at premium multiples.
Insight. The disagreement is about what happens after 2028. The company’s plan, taken at face value, supports roughly half the current price.
| Risk | Why it matters |
|---|---|
| The gas cycle turns | GE’s power business has boomed and collapsed before. If data-center demand slows or financing tightens, slot reservations are softer commitments than firm orders. |
| Execution on capacity | Raising output from 20 to 30 GW while keeping quality and delivery dates is the core of the plan. Delays would push revenue and cash flow out. |
| Wind | Losses of $400–500 million in 2026, unresolved claims at Vineyard Wind, another year of North Sea offshore work in 2027 and a weak U.S. market could cost more than planned. |
| Trench | A $9 billion purchase at about 13 times 2028 EBITDA, closing in late 2027, adds debt and integration work. |
| Tariffs and supply chain | Section 232 tariff decisions and input costs could squeeze margins on fixed-price contracts. |
| Valuation | At about twice the base-case value, the stock is exposed to any disappointment in orders or margins, as the swing from a 52-week low of $530 shows. |
Pricing keeps rising; electrification grows faster than planned on data-center and grid spending; nuclear (the BWRX-300) becomes a real business; and margins pass 20% as Wind shrinks. Any two together would move the value well above the bull case.
GE Vernova has a sold-out gas turbine franchise, a growing grid business, net cash and rising margins. On the company’s own 2028 targets the shares trade at about twice the model’s value.
What would change the value: A 2028 margin target above 20% or gas pricing still climbing through 2027 would raise the value; slot reservations failing to become firm orders would lower it. Power exiting 2026 at a margin in the mid-20s, as management now expects, and new targets at the next investor day are the inputs to watch.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $485. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 45% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating depends on that assumption: it would be Hold if the index grows 6% a year and Sell at 10%, against 8% here. How ratings work
Against the Street: Analysts average about $1,172 and value GE Vernova on earnings well beyond 2028 at premium multiples. This model uses the company’s own 2028 targets and then fades growth.
| Measure | GE Vernova | Industry median | Rank | |
|---|---|---|---|---|
| Revenue growth, last fiscal year | 9.0% | 4.5% | 19 of 82 | Better than the median |
| Operating margin | 6.4% | 17.5% | 73 of 82 | Worse than the median |
| Price to earnings | 22.7× | 26.6× | 25 of 81 | Better than the median |
| Free cash flow yield | 7.3% | 3.7% | 5 of 81 | Better than the median |
Peers: the 81 other S&P 500 companies in Industrials with complete data (ADP, ALLE, AME, AOS, AXON, BA, BE, BR, CARR, CAT, CHRW, CMI, CPRT, CSX, CTAS, DAL, DD, DE, DOV, EFX, EME, EMR, ETN, EXPD, FAST, FDX, FDXF, FERG, FIX, FTV, GD, GE, GNRC, GWW, HII, HON, HUBB, HWM, IEX, IR, ITW, J, JBHT, JCI, LDOS, LHX, LII, LMT, LUV, MAS, MMM, NDSN, NOC, NSC, ODFL, OTIS, PAYX, PCAR, PH, PNR, PWR, ROK, ROL, RSG, RTX, SNA, SWK, TDG, TT, TXT, UAL, UBER, UNP, UPS, URI, VLTO, VRSK, VRT, WAB, WM, XYL). Last twelve months where reported, from SEC filings; prices from the latest close. A lower price-to-earnings ratio ranks higher. These figures update with each data run; the rating does not.
GE Vernova is one of the clearest beneficiaries of rising power demand. On the company’s own targets the shares are fully valued; the upside depends on what comes after 2028.