GE Vernova Inc. GEV recently revealed its plans to invest almost $600 million in its U.S. factories and facilities over the next two years to address rising global energy demand, which is expected to double by 2050. This investment is aimed at enhancing energy affordability, national security and competitiveness while bolstering American manufacturing for expanding exports.
The initiative, part of the company’s broader $9-billion capital expenditure and research and development plan through 2028, underscores GEV’s role in driving innovation, energy security, and global competitiveness amid growing electricity demand worldwide.
Such a notable investment, the latest one since GEV’s spinoff in April 2024, might encourage energy investors to add GEV to their portfolio. However, before making any hasty decision, let’s delve into the company’s performance over the past year, growth prospects as well as risks (if any) to investing in the same. This way an investor can make a prudent and informed decision.
GEV Stock Outperforms Industry, Sector & S&P 500
Shares of GE Vernova have surged an impressive 154.6% in the past year, outperforming the Zacks Alternative-Energy industry’s growth of 75.5% and the broader Zacks Oils-Energy sector’s return of 6.9%. It has also outpaced the S&P 500’s surge of 22.8% over the same time period.
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A similar stellar performance has been delivered by other industry players, such as Talen Energy Corporation TLN, Constellation Energy Corporation CEG and Bloom Energy BE, whose shares have surged 248.6%, 141.2% and 109.5%, respectively, in the past year.
What’s Pushing GEV Stock Up?
The global shift toward clean energy solutions continues to be a key growth catalyst for GEV, a renowned renewable energy equipment and services provider. Impressively, as of January 2025, the company’s installed base of onshore wind turbines was approximately 56,000, with nearly 120 gigawatts (GW) of installed capacity worldwide. It also enjoys prowess in the offshore wind energy platform, with a portfolio of offshore wind turbines ranging between 6 MW and 14 MW.
In January 2025, GE Vernova’s Onshore Wind business announced that in 2024 it received orders to repower more than 1GW of wind turbines in the United States. These repower projects are expected to reach their commercial operation date between 2024 and 2027.
These announcements show the continuing efforts of GE Vernova to expand its footprint in the clean energy industry as a major provider of sustainable energy. This must have boosted investors’ confidence in this stock, which, in turn, was reflected in GEV’s share price hike as mentioned above.
Will GEV Stock Continue Its Growth?
With rising renewable energy adoption worldwide, GEV expects gas power generation to continue to grow significantly in the near term. This should continue to boost demand for its gas equipment and services, thereby bolstering the revenue generation prospects for its Gas Power business.
On the other hand, GEV’s grid solution equipment and services should also continue to experience a robust growth trend in the coming years, with global electricity demand expected to rise at a faster rate over the next three years — an average of 3.4% annually through 2026 (as per the latest report published by the International Energy Agency).
Such impressive growth projection should bode well for GE Vernova’s operating results in the long run.
In line with this, the Zacks Consensus Estimate for GEV’s long-term (three-to-five years) earnings growth is pegged at a solid 18%.
A quick sneak peek at its near-term estimates also shows a similar growth story.
Estimates for GEV
The Zacks Consensus Estimates for 2025 and 2026 sales implies an improvement of 5.4% and 9.1%, respectively, year over year.
However, the Zacks Consensus Estimate for first-quarter and full-year 2025 earnings per share has moved south 18.4% and 1.3%, respectively, over the past 60 days. The downward revision in earnings estimates indicates analysts’ declining confidence in the stock.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Risks to Consider Before Choosing GEV
Despite the aforementioned growth opportunities, GEV faces certain challenges that one should consider before investing in this stock. To this end, it is imperative to mention that the offshore wind industry has been facing increased challenges lately in the form of increased material costs and persistent supply-chain challenges. This, in turn, has led to several project cancellations in recent times.
As a manufacturer of wind turbines, GEV has been experiencing pressure in its offshore wind business due to product and project costs. Changes in execution timelines or other adverse developments might have an impact on GEV’s cash collection timelines and contract profitability, resulting in losses beyond current expectations.
Moreover, given the long-cycle nature of its power generation business, the company expects the impact of inflation to continue to be challenging for its business, which, in turn, might hurt the pricing of its products and services.
GEV Stock Trading at a Premium
In terms of valuation, GEV’s forward 12-month price-to-earnings (P/E) is 52.64X, a premium to its peer group’s average of 23.65X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared to its peers.
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Final Thoughts
To conclude, investors interested in GEV Vernova should wait for a better entry point, considering its premium valuation, downward revision in its near-term earnings estimate and the challenges it is facing in the wind market.
However, those who have already invested in this Zacks Rank #3 (Hold) company may continue to do so, as its upbeat sales estimates, solid share price returns over the past year and expected benefits from its recent investment strategy offer solid growth prospects.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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GE Vernova Inc. (GEV) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
