Company Performance and Growth Prospects - GE Vernova Inc (GEV) announced the commencement of operations at the Guangming gas plant in Guangdong, China, which will supply up to 2 GW of lower-carbon electricity [3] - GEV's stock surged 1622% in the past year, outperforming the Zacks Alternative-Energy industry's growth of 76%, the Zacks Oils-Energy sector's return of 76%, and the S&P 500's surge of 23% [4] - The company has an installed base of approximately 54,000 onshore wind turbines worldwide and a portfolio of offshore wind turbines ranging from 6 MW to 14 MW [5] - Global electricity demand is expected to rise at an average of 34% annually through 2026, which should benefit GEV's grid solution equipment and services [8] - GEV was chosen by Korea Electric Power Corporation (KEPCO) to deliver its advanced HVDC system for the Donghaean 2 to Dong-Seoul HVDC converter station project, the largest power grid infrastructure initiative in South Korea's history [9] - The Zacks Consensus Estimate for GEV's long-term earnings growth is pegged at 18% [10] Sales and Earnings Estimates - The Zacks Consensus Estimate for 2024 and 2025 sales implies year-over-year improvements of 55% and 52%, respectively [11] - The Zacks Consensus Estimate for 2024 earnings per share has moved south by 19% over the past 60 days, indicating declining analyst confidence [11] - Current quarter sales estimate is 1061B, with a year-over-year growth estimate of 748% for the next quarter [12] Challenges and Risks - The offshore wind industry faces increased material costs and persistent supply-chain challenges, leading to project cancellations [17] - GEV's Offshore Wind business is experiencing pressure related to product and project costs, which could impact cash collection timelines and contract profitability [18] - Inflation is expected to continue challenging GEV's power generation business, potentially hurting the pricing of its products and services [19] Valuation and Market Position - GEV's forward 12-month price-to-earnings (PE) ratio is 5416X, a premium to its peer group's average of 1363X, suggesting investors are paying a higher price for expected earnings growth [20] - GEV has a VGM Score of F, which is not a favorable indicator of strong performance [22] Expansion and Market Opportunities - GEV has been operating in China for over 40 years, with its Gas Power unit serving more than 110 customers and more than 240 gas turbines, with an installed power capacity of 50 GWs [24] - In January 2025, GEV's Onshore Wind business signed an order to provide 14 42MW-117m turbines for wind farms in Japan [26] - GEV announced a $20 million investment plan to enhance next-generation repair capabilities and technologies for HA gas turbines at its Advanced Manufacturing Repair Technology Center in Singapore [26] Industry Comparison - Other industry players, such as Talen Energy Corporation (TLN), Constellation Energy Corporation (CEG), and Bloom Energy (BE), have seen their shares surge 2294%, 1473%, and 809%, respectively, in the past year [25]
GE Vernova-Powered Gas Plant Starts Operation: Time to Buy the Stock?