Investors Must Be Confused About GE
GE (ticker GE) is indicative of an equity market that has been upside down since 2021.
GE would not be alive were it not for Government bailouts. Last I checked, GE is a stodgy old industrial company. GE does not design silicon used to build advanced AI models. GE is not an Enterprise Software company. GE’s Operating Margins are thin and always will be thin. Keep this in mind when you consider GE’s valuation:
GE will generate approximately $40 Billion of Revenue in calendar 2024, $7 Billion of Adjusted Operating Profit and $5 Billion of Free Cash Flow.
GE shares carry an Enterprise Value (EV) of $200 Billion, or 5x EV to Revenue, 29x EV to Operating Profit and 40x EV to Free Cash Flow. “Rich” does not begin to describe this lunacy.