GEV

GE Vernova is a genuine post-spin turnaround in a secular-growth industry. Net income has swung from -$2.74B (FY2022) to +$4.88B (FY2025), revenue has compounded from $29.7B to $38.1B (+9.0% in FY2025), operating cash flow nearly doubled to $4.99B (+93.1%), and ROE is a striking 43.7%. The balance sheet is a fortress: $8.85B cash (+110.7%) against just $63.0M of current debt, which funds a $3.32B buyback and $275M dividend. The MD&A frames durable tailwinds — electricity-demand growth, decarbonization, grid modernization and energy security — and the ~$5.3B Prolec GE transformer acquisition (closing Feb 2026, funded ~50/50 cash/debt) deepens the grid franchise into exactly the bottleneck the power buildout needs. On quality and direction alone this is a clear 'own it.'

The problem is earnings quality and price. Headline diluted EPS of $17.69 (+217%) and a 12.8% net margin sit on top of an operating margin of only 3.6%: net income of $4.88B actually exceeds operating income of $1.39B by ~$3.49B. That gap is below-the-line — interest on the cash pile, JV equity income, and almost certainly a large tax benefit typical of a turnaround — none of which is repeatable at that scale. So the 62.7x P/E rests on a flattered base; on the ~$1.39B of true operating profit, the multiple on operations is far higher. P/S of 7.9 and a ~1.2% free-cash-flow yield (OCF $4.99B less $1.28B capex on a $299B cap) say the same thing: a lot of future margin expansion is already in the price, and the stock is up another 5.8% today.