GE Vernova Inc.(US:GEV) ZACKS·2026-02-06 15:30Core Insights - GE Vernova Inc.'s shares have increased by 9.7% over the past month, outperforming the Zacks Alternate Energy – Other industry's growth of 5.4% [1][8] - The demand for electricity from AI data centers is a significant growth driver for GE Vernova, as the company can supply this demand with its turbines and grid equipment [1][5] Performance Comparison - Other alternative energy stocks, such as Crescent Energy Company and Bloom Energy, have also shown strong performance, with shares rising by 23.9% and 26.5%, respectively, over the same period [3] Factors Supporting Growth - GE Vernova is enhancing profitability in its wind business through cost discipline, while its gas and power services remain robust [5] - The company received orders to repower 1.1 gigawatts (GW) of onshore wind turbines in the U.S., expected to reach commercial operation between 2026 and 2027, which will increase the output and longevity of existing turbines [6] - A strategic alliance with Xcel Energy is expected to secure significant equipment reservations and long-term collaboration opportunities, boosting sales [7] - The launch of GridOS for Distribution aims to enhance the operation of distribution grids, increasing long-term recurring revenue potential from software services [9] - The full acquisition of Prolec GE expands GE Vernova's Electrification segment footprint and enhances its product portfolio [10] Earnings Estimates - The Zacks Consensus Estimate for GE Vernova's 2026 earnings per share (EPS) indicates an increase of 8.64% over the past 60 days, with a long-term earnings growth rate of 18% [11] Challenges - The company faces challenges due to reliance on complex global supply networks for components, with nearly $20 billion in materials sourced from over 100 countries, which may impact production timelines and costs [13] - Global tariffs imposed in 2025 resulted in additional costs of nearly $250 million, affecting profitability [14] Financial Performance - GE Vernova has beaten earnings estimates in three of the last four quarters, with an average surprise of 112.41% [15] - The company's trailing 12-month return on equity is 46.91%, significantly higher than the industry average of 6.39% [17] Valuation - GE Vernova is currently trading at a forward P/E ratio of 52.15, which is a premium compared to the industry's 22.39 [18] Investment Outlook - The company is positioned for growth through improved wind profitability and strategic alliances, while the premium valuation suggests current shareholders may stay invested, and new investors might wait for a better entry point [21][22]