Investment Thesis
GE demonstrates strong revenue growth (+18.5% YoY) and excellent profitability metrics with a 19.0% net margin, but financial health is significantly constrained by weak liquidity ratios and dangerously low interest coverage (0.8x), indicating potential debt servicing challenges. The exceptional ROE of 46.6% masks structural balance sheet concerns that require monitoring.
GE Strengths
- Strong revenue growth of 18.5% YoY showing market demand expansion
- Excellent profitability with 19.0% net margin and 21.8% operating margin
- Robust free cash flow of 7.3B with 15.8% FCF margin supporting operations and debt service
- Significant EPS growth of 35.9% YoY demonstrating improving per-share value
GE Risks
- Critical interest coverage ratio of 0.8x indicates insufficient operating income to cover debt obligations, raising solvency concerns
- Weak liquidity position with current ratio of 1.04x and quick ratio of 0.74x limiting financial flexibility
- Elevated leverage with debt-to-equity ratio of 1.10x and long-term debt of 20.5B relative to 18.7B equity base
- Gross margin of 15.3% is relatively low, suggesting limited pricing power or high cost structure
- Significant divergence between net income growth (0.0% YoY) and revenue growth (18.5% YoY) indicates operational headwinds
Key Metrics to Watch
- Interest coverage ratio trend - critical threshold for debt sustainability
- Debt reduction trajectory and refinancing activities
- Operating cash flow consistency and free cash flow sustainability
- Gross margin improvement potential through cost management
- Liquidity ratios and working capital management
GE Financial Metrics
Revenue
$45.9B
Net Income
$8.7B
EPS (Diluted)
$8.14
Free Cash Flow
$7.3B
Total Assets
$130.2B
Cash Position
$12.4B
GE Profitability Ratios
Gross Margin
15.3%
Operating Margin
21.8%
Net Margin
19.0%
ROE
46.6%
ROA
6.7%
FCF Margin
15.8%
GE Balance Sheet & Liquidity
Current Ratio
1.04x
Quick Ratio
0.74x
Debt/Equity
1.10x
Debt/Assets
85.5%
Interest Coverage
0.80x
Long-term Debt
$20.5B
Disclaimer: This analysis is generated by Claude AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 18, 2026 |
Data as of: 2025-12-31 |
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