What Does General Dynamics Corporation's (NYSE:GD) Share Price Indicate?
Let's talk about the popular General Dynamics Corporation (NYSE:GD). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$235 at one point, and dropping to the lows of US$209. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether General Dynamics' current trading price of US$211 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at General Dynamics’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for General Dynamics
Is General Dynamics Still Cheap?
Great news for investors – General Dynamics is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $306.18, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. General Dynamics’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will General Dynamics generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 28% over the next couple of years, the future seems bright for General Dynamics. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since GD is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on GD for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy GD. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
If you'd like to know more about General Dynamics as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with General Dynamics, and understanding this should be part of your investment process.
If you are no longer interested in General Dynamics, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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