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Is General Dynamics Corp (GD) Stock Trading Below Fair Value?

Monday, April 01, 2024 03:10 PM | InvestorsObserver Analysts

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Is General Dynamics Corp (GD) Stock Trading Below Fair Value?

General Dynamics Corp (GD) receives an average valuation ranking of 60 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. GD has a better value than 60% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 60
GD gets a 60 Valuation Rank today. Find out what this means to you and get the rest of the rankings on GD!

Metrics Analysis

GD's trailing-12-month Price to Earnings (PE) ratio of 23.35 puts it above the historical average of roughly 15. GD is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. GD's trailing-12-month earnings per share (EPS) of 11.98 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
GD currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.77. The market is currently overvaluing GD in relation to its projected growth due to the PEG ratio being above the fair market value of 1. GD's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

GD's valuation metrics are weak at its current price due to a overvalued PEG ratio despite strong growth. GD's PE and PEG are worse than the market average resulting in a below average valuation score. Click Here to get the full Report on General Dynamics Corp (GD) stock.

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