GE Vernova Inc. (GEV) stock intrinsic value fair value estimate & owner earnings analysis

GE Vernova makes and services the equipment that generates and moves electricity: gas and steam turbines and their long-term service contracts (Power), onshore and offshore wind turbines (Wind), and grid and electrification equipment (Electrification). It was spun out of General Electric in April 2024. About 46% of 2025 revenue came from the United States, about 20% from Europe and the balance from Asia, the rest of the Americas, the Middle East and Africa. What the business is worth. We measure the cash the business really produces for owners after replacing worn-out equipment, after stock compensation, and after removing swings in working capital. The largest such swing is customer deposits and slot-reservation payments on turbines, which lifted operating cash flow by about $8.0 billion in 2025 and by $13.7 billion in the first half of 2026. Those deposits are a timing benefit that is spent building the equipment, so we do not treat them as earnings. We also treated the year-to-year changes in long-term supplier advances, prepaid taxes and deferred charges as working-capital timing, as the company itself describes them. On that basis the business generated roughly $472 million in 2024 and $938 million in 2025 before interest, or about $1.70 and $3.40 per share. Only two full years exist since the spin-off (earlier statements were combined with General Electric and do not show stock compensation separately), so we anchor on the middle of those two years, about $705 million a year, rather than on the stronger 2025 alone. 2025 earnings were roughly double 2024, and we do not assume that pace continues. What we credited as growth. Contracted work is the only growth we counted. GE Vernova reported about $150 billion of remaining contracted revenue at the end of 2025: about $64 billion of equipment (roughly 37% due to be delivered in 2026 and 69% by the end of 2027) and about $86 billion of services on an installed base of about 7,000 gas turbines, roughly 1,800 of them under long-term service agreements. First-half 2026 revenue rose about 19%, in line with that backlog converting. We did not credit new orders, wider margins, a further rise in grid or data-center demand, or any market expansion, because none of that is contracted yet. Bear case, about $12.90 per share. The business is worth about $4.9 billion, it owes about $0.3 billion of borrowings and finance leases, and outside owners of subsidiaries claim about $1.1 billion, leaving about $3.5 billion. Earnings stay at the weaker 2024 level of about $472 million through 2027 while backlog is delivered, then fade about 8% a year as equipment orders are not replaced, settling at about half that level (about $236 million) from the long-term service contracts. In this case the customer deposits held today are needed to build the ordered equipment, so none of the cash pile is counted as surplus. Base case, about $63.80 per share. The business is worth about $15.1 billion, plus about $3.6 billion of cash beyond the roughly $5.2 billion of customer-funded working capital built up since the spin-off, less $0.3 billion of borrowings and $1.1 billion for outside owners, giving about $17.2 billion. Earnings start at the anchor and grow about 16% in 2026, 8% in 2027 and 3% in 2028 as backlog is delivered (the 2025 actual growth was about 99%, so this is a sharp slowdown), then stay flat because the installed-base service annuity keeps operating while no further growth is credited. Bull case, about $88.90 per share. The business is worth about $21.8 billion and the same cash and claims adjustments leave about $24.0 billion. Earnings start from the stronger 2025 level and grow with the delivered backlog at about 19%, 12% and 6% in 2026 to 2028 with no margin expansion, then stay flat. Debt. Borrowings are small (about $63 million of short-term debt and about $265 million of finance leases and other long-term borrowings), interest paid was only $53 million in 2025 and each case comfortably carries it. There is no maturity of concern. The company also bought back about $3.3 billion of shares in 2025. What could make this wrong. Our earnings level rests on two post-spin years, one of them a boom year, so a longer record could move it either way. The reported net income of $4.9 billion in 2025 was much higher than our cash figure mainly because of a $2.1 billion tax benefit and non-cash items, and roughly $1.4 billion of other operating outflows that we treated as timing could prove to be recurring costs, including cash losses on offshore wind contracts. On the other side, if the pricing embedded in the contracted backlog produces materially better cash margins than 2025 achieved, all three cases are too low. We could not reconcile every line inside the other operating activities figure to a specific balance sheet item from the annual report.