GEV Stock Rises 3.5% in a Month: What's the Best Move for Investors?

Core Insights - GE Vernova Inc.'s (GEV) shares have increased by 3.5% over the past month, contrasting with a 2.5% decline in the Zacks Alternate Energy – Other industry, indicating strong performance in a challenging market [1][6] - The company is positioned as a key supplier for data centers, benefiting from the growing demand for reliable energy sources [1][3] Performance Overview - GEV's gas turbines are essential for data centers, creating opportunities for long-term contracts and recurring revenue [1][3] - Other alternative energy stocks, such as Constellation Energy Corporation (CEG) and Bloom Energy (BE), have underperformed, with CEG down 3.7% and BE down 26.2% in the same period [1] Growth Factors - GEV is enhancing profitability in its wind division through cost controls and disciplined project management [3] - The company benefits from a large installed base and steady maintenance demand in its gas and power services [3] - The rapid expansion of data centers and AI-driven energy needs is driving broader demand for energy infrastructure [3] Strategic Developments - In November 2025, GEV secured its first wind repower upgrade contract outside the U.S., enhancing its position in the lifecycle-extension market [4] - GEV has received orders for gas turbines to support Poland's energy transition, expected to reduce emissions by up to 60% compared to existing fossil fuel plants [8] Business Diversification - GEV's diversified operations across Power, Wind, and Electrification allow it to offer a comprehensive suite of solutions, appealing to a wide range of customers [9] Earnings Estimates - The Zacks Consensus Estimate for GEV's 2025 earnings per share (EPS) indicates a decrease of 3.36%, while the estimate for 2026 implies a slight increase of 0.55% [10] Challenges - GEV faces global supply-chain disruptions and rising input costs, which may impact production timelines and profitability [12][13] - The company anticipates that global tariffs in 2025 will increase costs, with a projected impact of $300-$400 million for the year [14][15] Financial Performance - GEV has a trailing 12-month return on equity of 17.07%, significantly higher than the industry average of 6.23% [16] - GEV is currently trading at a forward P/E ratio of 48.66, which is a premium compared to the industry's 20.85 [18] Investment Outlook - GEV is strengthening its growth profile through improved profitability in its wind division and rising demand for energy infrastructure [21] - Current shareholders are advised to stay invested, while new investors may consider waiting for a more favorable entry point [22]