GD Stock Analysis — General Dynamics
Sector: Industrials
AI Verdict
General Dynamics trades at 20.2x next year's earnings for 16.1% expected EPS growth—you're getting fair value for the growth, underpinned by government contract moats, but the recent revenue decline means the growth narrative needs to show up in actual results.
Competitive Moat
General Dynamics builds nuclear submarines, combat vehicles, and Gulfstream business jets—products with high barriers to entry due to government contracting, defense technology, and regulatory complexity. Its long-term contracts with the U.S. Department of Defense create a moat that is difficult for new entrants to breach.
Summary
General Dynamics is trading at 20.2x next year's earnings with analysts expecting 16.1% EPS growth, making it a standout among defense contractors for valuation and growth.
Where It Stands
Shares are up 17.74% over the past year, RSI sits at a neutral 49.4, and the stock trades at 20.2x forward earnings versus the industrials sector median of 20x.
Key Metrics
- RSI: 49.4 — Neutral
- Trailing P/E: 23.5x
- Forward P/E: 20.2x
- PEG Ratio: 1.61
- Earnings Growth: +0.2%
- Revenue Growth: -0.2%
- Market Cap: $100.9B
- Dividend Yield: 0.02%
- 1-Year Return: 17.74%
- 52-Week High: $380.71
- 52-Week Low: $293.95
Analyst Consensus
21 Buy · 11 Hold · 1 Sell (33 analysts)
Bull Case
A 16.1% forward EPS growth rate paired with a 20.2x forward P/E means you're paying a fair price for above-average earnings momentum in a sector where growth is typically slower.
Bear Case
If the P/E reverts from 20.2x forward to the sector median of 20x, that's a minor 1% valuation risk, but the -16.9% revenue growth over the past year signals potential headwinds if not reversed.
Catalyst to Watch
Watch for new defense contract wins or major Gulfstream orders—either could confirm the 16.1% EPS growth outlook and justify the current multiple.