General Dynamics (GD)
Industrials · $97.8B market cap · SEC CIK 0000040533
ahead of 46% of the S&P 500 · #38 of 79 in Industrials
Next reports on Jan 26, 2027, after the close, with analysts expecting $4.70 in earnings per share.
52-week range $306.77 to $400.00. 8% below its 52-week high and 20% above its low.
The case for GD
- Revenue growing 9.7% year over year.
- Return on equity of 18%.
- Moves less than the market (beta 0.28).
- Pays a modest 2.1% dividend.
The case against
- Profitability is weak (36/100): return on equity 18%, net margin 8.2%, gross margin 15%, 94% of profit turned to cash.
- Weakest against its peers: net margin of 8% is thinner than 73% of Industrials companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 60 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 51 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 36 |
| Momentumhow the price has behaved lately | 50 |
| Stabilityhow violently it moves, what it owes and what it pays you | 89 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +9.7% |
|---|---|
| Over 5 years | +6.7% a year |
| FY2025 revenue | $52.5B (+10%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $4.0B |
|---|---|
| Of revenue | 8% |
| Of profit | 94% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | 15% |
|---|---|
| Operating margin | 10% |
| Net margin, FY24 → FY25 → now | 7.9% → 8.0% → 8.2% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $2.3B |
|---|---|
| Long-term debt | $7.0B |
| Net debt | $4.7B |
| Years to repay | 1.4 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 21.0× |
|---|---|
| Fair P/E for its growth | 23× |
| P/FCF | 24.7× |
| Forward P/E | 20.2× |
| EV / EBITDA | 14.8× |
At 21.0× earnings it trades close to the 23× that 8% a year of growth plus a 2.1% dividend would justify. At 24.7× free cash flow it trades close to that same mark.
The financials, five years deep
Pulled from General Dynamics's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $52.5B | $47.7B | $42.3B | $39.4B | $38.5B |
| Change on the year | +10% | +13% | +7% | +2% | — |
| Free cash flow | |||||
| Free cash flow | $4.0B | $3.2B | $3.8B | $3.5B | $3.4B |
| Of revenue | 8% | 7% | 9% | 9% | 9% |
| Profit margins | |||||
| Operating margin | 10.2% | 10.1% | 10.0% | 10.7% | 10.8% |
| Net margin | 8.0% | 7.9% | 7.8% | 8.6% | 8.5% |
| Debt vs. cash | |||||
| Cash | $2.3B | $1.7B | $1.9B | $1.2B | $1.6B |
| Long-term debt | $7.0B | $7.3B | $8.8B | $9.2B | $10.5B |
| Net cash (debt) | −$4.7B | −$5.6B | −$6.8B | −$8.0B | −$8.9B |
What General Dynamics says it does
(Dollars in millions, unless otherwise noted) BUSINESS OVERVIEW General Dynamics is a global aerospace and defense company that specializes in high-end design, engineering and manufacturing to deliver state-of-the-art solutions to our customers. We offer a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapon systems and munitions; and technology products and services. Our leadership positions in attractive business aviation and defense markets enable us to deliver superior and enduring capabilities to our customers and returns to our shareholders. Our company consists of 10 business units, which are organized into four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies. We refer to the latter three collectively as our defense segments. To ensure market focus, customer intimacy, agility and operating expertise, each business unit is…
Risk factors GD lists in its 10-K
- The U.S. government provides a significant portion of our revenue
- U.S. government contracts are not always fully funded at inception, and any funding is subject to disruption or delay
- Government contracts are subject to termination rights by the customer
- Government contractors operate in a highly regulated environment and are subject to audit by the U.S. government
- Our Aerospace segment is subject to changing customer demand for business aircraft
- Earnings and margin depend on our ability to perform on our contracts
- Revenue, earnings and margin depend in part on supplier performance
- Our success depends in part on our ability to develop new products and technologies and maintain a qualified workforce to meet the needs of our customers
- Operations outside the United States are subject to various risks that may be associated with doing business in foreign countries
- We have made and expect to continue to make investments, including acquisitions and joint ventures, that involve risks and uncertainties
- Changes in business conditions may cause goodwill and other intangible assets to become impaired
- Our business could be negatively impacted by cybersecurity events and other disruptions
- Our business may continue to be negatively impacted by the coronavirus (COVID-19) pandemic and could be negatively impacted by other pandemics and outbreaks
- Global climate change could negatively affect our business