$25.70
$77.90
bear $25.70
base $61.20
bull $77.90
margin of safety $38.00
market price* $69.57
GE HealthCare is one of the world's three large makers of medical imaging equipment. It sells CT, MRI, X-ray, ultrasound and molecular-imaging systems (Imaging and Advanced Visualization Solutions segments), patient monitoring and care equipment (Patient Care Solutions), and contrast and radiopharmaceutical agents such as Omnipaque (Pharmaceutical Diagnostics). Of its 2025 revenue of $20.6 billion, roughly 44% came from the United States and 10% from China. Much of the value comes from what follows the sale: hospitals that own a GE scanner buy service contracts, software and consumables for a decade or more. Contracted future revenue stood at $15.7 billion at the end of 2025, up from $14.5 billion a year earlier, with $10.7 billion of it service contracts. How we measured earning power. We started from operating cash flow and removed the year-to-year swings in receivables, inventories and payables, then deducted stock compensation and the share of capital spending needed just to keep the business running (about 2% of sales; the growth portion is small). For valuation we add back the interest the company pays, so we value the whole business first and then subtract debt. Per share, that business cash flow was $4.40 in 2023, $4.65 in 2024 and $4.96 in 2025. The company was spun out of General Electric in January 2023 and earlier years reflect GE's financing arrangements, so we anchor on the median of 2023-2025, $4.65 per share (about $2.1 billion). We did not lift the anchor to the 2025 figure because 2025 included a large inventory build tied to about $285 million of incremental tariffs and one strong year does not change the normal level. The business cash flow grew 6.8% per share in 2025; our base case assumes 3.5% in year one, below that trailing rate. Debt. At March 31, 2026 the company had about $10.1 billion of borrowings (senior notes mostly at fixed rates of roughly 4-6%, close to our 6% yardstick, so we made only a small downward adjustment of about $0.2 billion) and $2.3 billion of cash. It also paid about $2.3 billion in cash in early 2026 for Intelerad (imaging software); we count that business at what was paid, since we have no separate earnings record for it. After keeping about $1 billion of cash for operations, net debt is roughly $6.4 billion, or about $14 per share. Interest of about $0.5 billion a year is comfortably covered by $2.1 billion of business cash flow, and no maturity is a problem in any case we built. Base case, worth about $61 per share (business worth $34 billion, less $6.4 billion net debt). Business cash flow grows 3.5% a year in years 1-2, 3% in years 3-5, 2.5% in years 6-7 and 2% in years 8-10. That is below the roughly 4% annual revenue growth the company achieved from 2022 to 2025 and is supported by growth already in the bag: contracted backlog growing 8.5% in 2025 and a large installed base whose service contracts recur. After year 10 we hold earning power flat for ten years, because the installed base and regulatory approvals keep producing service and replacement demand, then fade it to zero over the following fifteen years, since we cannot evidence anything beyond that. We give no credit for new-product launches, market expansion, margin recovery or share gains, none of which is secured. Bear case, worth about $26 per share (business worth $18 billion, less $6.4 billion net debt). China revenue has fallen from $2.56 billion (2023) to $2.03 billion (2025) and the filing flags China's volume-based procurement; if it falls by another 40% that removes roughly $0.5 per share. Tariff cost inflation, which already cut 2025 profit in Imaging ($71 million lower) and Patient Care Solutions ($137 million lower), continues without being recovered in price, worth roughly another $0.3 per share. Business cash flow settles at $3.80 per share with no growth for ten years and then fades to zero over fifteen years. Even here interest is covered about three times over. Bull case, worth about $78 per share (business worth $42 billion, less $6.4 billion net debt). The levers the company is already pulling work: business cash flow grows 5% a year for five years, then 4% for five, in line with the 6.8% it just achieved and backed by the growing service backlog, manufacturing capacity expansion already funded ($482 million of capital spending in 2025) and demonstrated pricing gains in Pharmaceutical Diagnostics (segment profit up $89 million in 2025). Earnings then hold flat for fifteen years before fading over fifteen more. What could make this wrong. Hospital equipment budgets are cyclical, tariffs could be larger or smaller than assumed, and China could stabilise (helping us) or fall faster (hurting us). Amortisation of acquired intangibles ($291 million in 2025, falling to $93 million by 2030) is a non-cash charge that we correctly add back, and we carry the fact that acquired technology ages through the flat-then-fading path rather than by lowering today's earnings. Pension contributions of about $340 million a year already run through cash flow and are not deducted again. We could not reconcile the 2025 change in all other operating activities (a $204 million outflow) to a single cause from the filing, so we left it inside the working-capital swings that are removed from the base level.