GE Vernova’s gas-power and grid backlog supports a much stronger earnings path, but the November 2 share price already capitalizes most of the company’s published 2028 outlook. Our one-year Base value is $921.08 per share versus the $862.25 regular-session close. The upside is modest because nine-month free cash flow was dominated by customer advances, Wind still lost money, and the $9 billion Trench acquisition adds closing and financing risk. The more optimistic public analyst average primarily requires higher 2028 EBITDA, a richer multiple, stronger net cash or a lower diluted share count.
GE Vernova trades on the NYSE under GEV. Unless stated otherwise, amounts are U.S. dollars and financial data are consolidated figures for the quarter ended September 30, 2026. S&P Global Market Intelligence’s daily history recorded an $862.25 regular-session close on November 2, 2026. A public pre-market quote was $871.00 at 6:49 a.m. ET on November 3, but we use the completed regular session consistently. At $862.25 and the September 30 actual share count of 264.677 million, the dated equity value is approximately $228.2 billion.
Three findings
- Power and Electrification are converting scarcity into margin. Third-quarter segment EBITDA margins reached 21.4% and 19.1%, while contracted remaining performance obligations reached $196.7 billion companywide.
- 2026 free cash flow is real cash, but not a clean recurring run-rate. Nine-month free cash flow was $15.3 billion, while working capital contributed $17.0 billion, led by customer down payments and slot reservations.
- Valuation already assumes substantial execution. The dated price implies approximately 18.8 times our 2028 combined EBITDA input after giving effect to Trench funding. Our Base case produces $921.08, 22.4% below the $1,187.07 public analyst mean.
How GE Vernova makes money
Power sells gas, nuclear and hydro equipment and services. The installed base matters because long-term gas and nuclear service agreements turn delivered equipment into recurring maintenance, parts and outage revenue. In the third quarter, services were $3.197 billion, or 52.7% of Power revenue. Electrification sells transformers, switchgear, high-voltage direct-current and alternating-current systems, power conversion and storage equipment, and grid software. Wind sells onshore and offshore turbines, repower equipment, blades and services.
The economic engines are not equally mature. Gas Power benefits from constrained equipment slots, favorable pricing and a growing service base. Electrification is expanding around grid bottlenecks and now includes the fully consolidated Prolec GE transformer business. Wind improved to a small quarterly profit, but it remained loss-making over the first nine months. A single companywide growth rate therefore hides three different margin and cash profiles.
Power and grid margins are carrying the portfolio
| Q3 2026 segment | Revenue | Segment EBITDA | Margin | RPO at Sept. 30 |
|---|---|---|---|---|
| Power | $6.067bn | $1.297bn | 21.4% | $130.854bn |
| Electrification | $3.862bn | $739m | 19.1% | $46.148bn |
| Wind | $2.741bn | $72m | 2.6% | $19.952bn |
Power’s third-quarter revenue grew 25% and segment EBITDA nearly doubled. Management attributed the increase mainly to more Aeroderivative and Heavy-Duty Gas Turbine deliveries, favorable pricing and service strength. Power RPO rose 38% from December 2025. Gas Power equipment backlog and slot reservation agreements totaled 122 gigawatts, and management expects at least 130 GW by year-end. A slot reservation is not the same as a firm equipment order, so we do not count every reserved gigawatt as completed sales.
Electrification’s reported revenue grew 51%, but the acquisition of the remaining Prolec GE stake contributed to that comparison. Organic growth was 16%. Its $46.1 billion RPO included $5.0 billion added with Prolec GE, plus demand for transformers, switchgear and substation solutions. The margin expansion is nevertheless economically important: volume, productivity and favorable pricing lifted quarterly segment EBITDA to $739 million.
Wind is the offset. It earned $72 million of segment EBITDA in the quarter, but lost $585 million over the first nine months. Wind RPO fell 8% from year-end 2025, reflecting execution of offshore contracts and lower North American onshore orders. Management’s full-year outlook still calls for a $400 million to $500 million EBITDA loss. The Base case does not assume Wind suddenly earns the same margins as Power or Electrification.
The backlog is large, but conversion timing matters
| Sept. 30, 2026 RPO | Amount | Expected recognition |
|---|---|---|
| Equipment | $104.054bn | 33% within 1 year; 60% within 2 years; 97% within 5 years |
| Services | $92.667bn | 16% within 1 year; 54% within 5 years; 78% within 10 years; 91% within 15 years |
| Total | $196.721bn | Conversion depends on delivery, service performance and contract changes |
The service portion is particularly valuable because it extends beyond the equipment cycle. It also carries execution assumptions: turbine utilization, parts costs, outage timing and contract estimates affect the profit realized over many years. Equipment RPO provides nearer-term volume, but capacity expansion, supply chains and project delivery determine whether backlog becomes revenue on schedule. RPO is evidence of contracted demand, not a substitute for margin or cash collection.
Free cash flow is strong—and heavily front-loaded
| 9M 2026 cash item | Amount | Interpretation |
|---|---|---|
| Cash from operating activities | $16.737bn | GAAP operating cash flow |
| Capital and internal-use software additions | ($1.430bn) | Deducted in company-defined FCF |
| Free cash flow | $15.307bn | Non-GAAP |
| Working-capital inflow | $17.0bn | Mostly customer advances and payables |
| Increase in contract liabilities and current deferred income | $19.5bn | Down payments on Power orders and reservations, plus Electrification advances |
GE Vernova raised 2026 guidance to $46.5 billion-$47.5 billion of revenue, a 13.5%-14.5% adjusted EBITDA margin and $16 billion-$17 billion of free cash flow. The midpoint implies approximately $6.58 billion of adjusted EBITDA. This is materially stronger than the prior outlook. Nine-month GAAP net income also included a $3.992 billion pre-tax remeasurement gain on the existing Prolec GE stake and a $366 million pre-tax Proficy disposition gain; the reported $24.81 diluted EPS is therefore not a normalized earnings run-rate.
But the cash bridge is the valuation constraint. Customer advances are useful operating funding that may carry a lower financing cost than external capital. They are not the same as profit: GE Vernova still owes the equipment or service. If order growth normalizes, working capital may stop contributing at the same rate or reverse as the company spends to deliver backlog. We therefore anchor valuation on 2028 EBITDA and capital structure, not on annualizing 2026 free cash flow. This extends the issue identified in our Trench acquisition and cash-flow review.
The balance sheet can fund growth, but Trench uses capacity
September 30 cash, cash equivalents and restricted cash were $16.764 billion, while long-term borrowings including current maturities were $2.826 billion. Simple net cash was therefore approximately $13.938 billion before excluding about $0.4 billion of restricted cash. Actual shares outstanding fell from 269.529 million at December 2025 to 264.677 million, helped by $5.3 billion of nine-month repurchases. Q3 diluted weighted-average shares were 268 million, which we use in the Base model.
The planned Trench acquisition changes the capital structure. GE Vernova announced a roughly $9 billion price, expected to be funded half with cash and half with debt, with closing targeted for late 2027 subject to approvals. On a simple pro forma basis, cash falls by $4.5 billion and debt rises by $4.5 billion, reducing net cash by the full $9 billion to about $4.938 billion. Actual closing cash, debt and foreign-exchange values will differ.
Trench’s company-provided 2028 forecast is $1.9 billion of revenue at approximately a 36% adjusted EBITDA margin, or $684 million of calculated EBITDA before synergies. That forecast is not yet GE Vernova’s reported earnings. Regulatory approval, financing, integration and factory execution remain open. We value Trench separately and reduce net cash for the announced purchase funding rather than quietly adding its EBITDA without paying for the asset.
Valuation: today’s price already discounts the 2028 plan
Our valuation date is November 3, 2026; the target date is November 3, 2027; and the primary forecast year is fiscal 2028. We use a sum-of-the-parts enterprise-value-to-adjusted-EBITDA method because segment margins are moving quickly, 2026 cash flow contains a large advance-payment effect, and Trench is not yet consolidated. The formula is:
Value per share = [(core 2028 adjusted EBITDA × core EV/EBITDA) + (Trench 2028 adjusted EBITDA × Trench EV/EBITDA) + pro forma net cash] ÷ diluted shares.
The multiples are AHNIM STUDIO scenario assumptions, not company guidance. Bear compresses the multiple for a missed margin path; Base uses 20.5× for long-duration gas and grid backlog but gives no value to acquisition synergies; Bull requires sustained double-digit growth and cleaner cash conversion. The target assumes Trench closes at or near the target date. A delay would require removing both Trench enterprise value and the acquisition funding bridge until closing.
| Scenario | Core 2028 EBITDA / multiple | Trench EBITDA / multiple | Net cash | Diluted shares | Value/share |
|---|---|---|---|---|---|
| Bear | $9.0bn / 15.0× | $570m / 12.0× | $2.0bn | 270m | $532.74 |
| Base | $11.2bn / 20.5× | $684m / 18.0× | $4.938bn | 268m | $921.08 |
| Bull | $12.5bn / 24.0× | $760m / 22.0× | $7.0bn | 264m | $1,226.21 |
The Bear case assumes the core company misses the 2028 margin path, Wind remains a drag, Trench earns less than forecast and acquisition funding leaves less net cash. The Base case uses management’s $56 billion and 20% pre-Trench outlook, but applies no acquisition synergy and a 268 million diluted denominator. The Bull case requires core EBITDA above the current company outlook, Trench execution at a 40% margin, a 24× premium multiple and continued share-count discipline.
As a cross-check, the $862.25 close and the September 30 actual share count imply approximately $228.2 billion of equity value. Subtracting pre-deal simple net cash gives roughly $214.3 billion of enterprise value, or 19.1× the company’s $11.2 billion pre-Trench 2028 EBITDA outlook. Giving effect to the $9 billion funding plan and adding $684 million of Trench EBITDA produces approximately 18.8× combined 2028 EBITDA. That is already a premium valuation for industrial execution that still includes Wind losses and a pending acquisition.
Analyst targets assume more upside than our Base case
A public S&P Global aggregation viewed November 3 listed 38 analysts with an average 12-month target of $1,187.07, a $1,200 median and a $940-$1,400 displayed range. A separate TipRanks three-month sample listed 18 analysts and a $1,170.06 average; the samples and timing differ, so we do not combine them. Recent public summaries show rating continuity but wide valuation disagreement: Guggenheim maintained Buy while cutting its target from $1,450 to $1,400 on November 2; HSBC upgraded Hold to Buy and raised $1,040 to $1,100 on October 30; JPMorgan maintained Overweight while cutting $1,150 to $1,035 on October 29; and GLJ Research maintained Sell while raising $470 to $540 on October 30. We did not access the full broker reports, so these are dated secondary-source summaries rather than our reading of the complete notes.
Our $921.08 Base value is 22.4% below the $1,187.07 analyst mean: |$921.08−$1,187.07|÷$1,187.07. This crosses AHNIM STUDIO’s 20% review threshold. The principal difference is not the backlog; it is what investors pay for it. Our Base uses 20.5× core 2028 EBITDA, explicitly pays for Trench through the net-cash bridge, uses 268 million diluted shares and does not treat 2026 customer advances as perpetual free cash flow. The Base value would move toward the public average if Power and Electrification exceed the 2028 margin outlook, Wind reaches durable profitability, Trench closes without higher funding costs and working-capital cash converts into profit without reversal.
What would change the view?
- Backlog quality: firm Gas Power equipment orders versus reservations, equipment pricing and service attachment.
- Cash conversion: free cash flow after customer advances are used to build and deliver equipment.
- Electrification execution: organic growth and margins separated from Prolec GE consolidation.
- Wind repair: contract-loss charges, delivery costs and a path from quarterly breakeven to full-year profitability.
- Trench closing: approvals, final exchange-rate value, funding costs, integration spending and standalone results versus the $684 million 2028 EBITDA forecast.
- Per-share compounding: repurchases below intrinsic value versus cash used at premium prices or offset by stock compensation.
GE Vernova is a broader electricity-infrastructure platform than a data-center component supplier. For useful adjacent comparisons, see our analysis of Vertiv’s AI power-and-cooling backlog and service economics and Preformed Line Products’ grid growth and cash conversion.
This article is for information and education, not individualized investment advice. It separates company filings, management outlooks, external estimates and AHNIM STUDIO assumptions. Read our research, valuation and corrections policy.
Sources and original documents
- GE Vernova Form 10-Q for the quarter ended September 30, 2026, filed October 28, 2026: GAAP financial statements, segment results, RPO, cash flow, debt, shares and repurchases.
- GE Vernova Q3 2026 earnings release, October 28, 2026: orders, non-GAAP results, guidance and segment outlook.
- GE Vernova Q3 2026 investor event and presentation materials, October 28, 2026.
- GE Vernova Trench Group acquisition release, October 28, 2026: announced price, funding, closing timing and 2028 forecast.
- GE Vernova full-year 2025 results and updated 2028 outlook, January 28, 2026: $56 billion revenue and 20% adjusted EBITDA margin outlook.
- GE Vernova daily price history, S&P Global Market Intelligence, November 2, 2026 close.
- GE Vernova analyst target aggregation, S&P Global, viewed November 3, 2026.
- GE Vernova analyst rating actions, public aggregation viewed November 3, 2026.