GE Vernova shares rallied more than 15% to a new all-time high Thursday after the power equipment maker reported strong results and raised guidance — “maybe the best story in the entire market,” Jim Cramer said . Revenue for the three months ended June 30 increased 11% year over year to $9.11 billion, topping expectations of $8.8 billion, according to LSEG. Organically, revenue increased 12%, beating the 10.6% Street estimate, according to FactSet Orders increased 4% organically to $12.4 billion, driven by strong demand for power and electrification solutions. Analysts often focus on orders to gauge demand, versus sales, which could be the result of fulfilling past orders. Adjusted earnings per share (EPS) hit $1.86, exceeding the $1.51 estimate, LSEG data showed. GE Vernova Why we own it : The company has several powerful secular tailwinds going in its favor, including the need for more reliable power and electrification, especially as AI drives up demand for energy-intensive data centers. GE Vernova may also prove a beneficiary of deals as countries work with the Trump administration to reduce bilateral trade deficits. Competitors : Siemens Energy , MHI Most recent buy : May 19, 2025 Initiated : May 13, 2025 Bottom line Expectations were high heading into the print: GE Vernova shares were less than 5% off their all-time highs and up more than 100% from April lows. That’s why we chose to trim our position last week. In hindsight, that may appear to be the wrong move, given Wednesday’s price action. But we aren’t going to beat ourselves up over what is still a big win. Our view is that discipline trumps conviction. And talk about a strong showing. GE Vernova leaped over the market’s high bar by delivering strong order growth and robust EBITDA margin expansion. “This era of accelerated electrification is driving unprecedented investments in reliable power, grid infrastructure, and decarbonization solutions,” CEO Scott Strazik said on the post-earnings call with investors. GE Vernova’s electrification equipment backlog increased by $2 billion in the quarter, with strong demand coming from Europe, North America, and Asia. Demand is also accelerating in the Middle East, with management highlighting a deal with Saudi Arabia for grid stabilization equipment expected to result in $1.5 billion in order volume in the current (third) quarter. On the call, Strazik said technologies like synchronous condensers, which are needed to increase power grid stability, “have been a small market over the last decade, but we see this as a credible $5 billion market opportunity a year going forward and are investing in positioning our businesses to serve this opportunity.” Data center electrification demand isn’t showing any signs of slowing, with management calling out nearly $500 million in orders for the first half of 2025, compared to $600 million for the entirety of 2024. On the backlog, which represents potential future revenue as orders are fulfilled, GE Vernova’s combined equipment and services backlog expanded to nearly $129 billion, up $5.2 billion sequentially and up over 11% from a year ago, driven by power and electrification. An estimated $9.6 billion increase to the total power backlog and $6.7 billion increase to the total electrification backlog were partially offset by an estimated $3.3 billion decline in the total wind backlog. Management returned roughly $450 million to shareholders during the quarter via dividends and buybacks. With about $8 billion in cash on the balance sheet, no debt, and positive cash flows, GE Vernova is well positioned to keep returning cash to shareholders while maintaining investments in future growth. As a result of the growing backlog and strong end market demand, we are increasing our price target to $700 from $550. However, we are keeping our 2 rating given the stock’s massive run on Wednesday. We’ll wait for a pullback before adding to our position. GEV 1Y mountain GE Vernova One Year Return Guidance Management raised its outlook for the year, and now expects revenue to come in at the higher end of the previously stated $36 to $37 billion range. On the EBITDA margin, the team is now targeting a range of 8% to 9%, representing an increase to the low end of the previous target for “high-single digits.” Free cash flow guidance was also increased to a range of $3 to $3.5 billion, up from the prior range of $2 to $2.5 billion. Segment guidance was updated as follows: Power: 6% to 7% organic revenue growth versus “mid-single digit” growth previously forecast. EBITDA margin of 14% to 15%, up from 13% to 14%. Wind: Still expecting an organic revenue decline in the mid-single digit range. The team is now expecting the segment EBITDA loss to track closer to the bottom of the…
Read More: We’re raising price target on GE Vernova by $150 after blowout earnings