General Dynamics Corporation (GD) Stock Valuation — DCF Analysis
Aerospace & Defense · NYSE
Current Price
$359.42
Intrinsic Value
$425.19
+15.5% margin of safety
COMPETITIVE MOAT
↑Long-Term Defense Contracts
GD benefits from multi-year, high-value contracts with governments. These provide predictable revenue streams and create significant barriers to entry for competitors.
↑Technological Expertise
The company possesses deep expertise in complex defense technologies like submarines and combat vehicles. This specialized knowledge is difficult and time-consuming to replicate.
↑Government Relationships
Strong, established relationships with defense ministries globally are crucial. These relationships facilitate access to future programs and influence procurement decisions.
INVESTMENT RISKS
↓Government Budget Fluctuations
Defense spending is subject to political shifts and budget constraints. Reductions in government outlays can directly impact GD's revenue and profitability.
↓Supply Chain Dependencies
Reliance on specialized components, including potentially rare earth materials, creates vulnerability. Disruptions in these supply chains can delay production and increase costs.
↓Program Delays and Cost Overruns
Complex defense projects are prone to development challenges. Unexpected delays or cost increases can negatively affect margins and investor sentiment.
Base case
GD base case valuation
A base case discounted cash flow model for GD estimates an intrinsic value of about $425.19 per share, against a current price of $359.42. The model assumes 7.0% annual free cash flow growth, a 10.0% discount rate, and a 16x exit multiple.
Intrinsic Value
$425.19
Margin of safety
+15.5%
Expected annual return
+3.4%
Base case assumptions: 7.0% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the GD valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for General Dynamics Corporation respond.
Open DCF Calculator for GDCompany Overview
General Dynamics Corporation is a global leader in the aerospace and defense industry, with its operations structured across four key divisions: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment focuses on the design, production, and sale of business jets, alongside offering a full suite of aviation services including aircraft maintenance, repair, management, charter services, and ground support. Marine Systems specializes in shipbuilding for the U.S. Navy, constructing nuclear-powered submarines, surface warships, and auxiliary vessels. This division also builds various commercial ships, such as tankers and cargo carriers. Furthermore, it provides extensive maintenance, modernization, and lifecycle support, along with engineering and design services for both naval and commercial fleets. Combat Systems is dedicated to creating land-based defense solutions, manufacturing a diverse range of products including wheeled and tracked combat vehicles (like the Stryker and Piranha), main battle tanks, armored vehicles, weapon systems, munitions, and mobile bridge systems. This segment also delivers modernization programs, engineering expertise, and ongoing sustainment services. The Technologies division offers sophisticated information technology and mission support services, catering primarily to military, intelligence, and federal civilian clients. Its offerings span mobile communication, computing, command-and-control systems, and intelligence, surveillance, and reconnaissance (ISR) capabilities. Additionally, this segment is deeply involved in cutting-edge areas such as cloud computing, artificial intelligence, machine learning, big data analytics, DevOps, software-defined networks, "everything-as-a-service" models, defense enterprise office systems, and the assembly of unmanned undersea vehicles. Established in 1899, General Dynamics Corporation is headquartered in Reston, Virginia.
Financial Metrics — GD Stock Valuation Data
Revenue/Share (TTM)
$199.14
FCF/Share (TTM)
$22.95
ROIC (TTM)
10.8%
ROE (TTM)
17.4%
P/FCF
15.7x
EV/EBITDA
16.1x
FCF Yield
6.38%
Debt/Equity
0.31x
Based on trailing twelve-month data, GD shows a free cash flow per share of $22.95 and a ROIC of 10.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 15.7x and FCF yield of 6.38% are important context metrics when evaluating GD's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of GD?
General Dynamics Corporation currently generates $22.95 in free cash flow per share. At the current price of $359.42, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is GD undervalued?
GD trades at a P/FCF ratio of 15.7x with a free cash flow yield of 6.38%. This P/FCF is in a moderate range. However, whether GD is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value GD stock using DCF?
To perform a DCF valuation on General Dynamics Corporation: (1) Start with the trailing free cash flow per share ($22.95) as the base, (2) project future FCF growth over 5-10 years based on Aerospace & Defense industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting GD's risk profile — with a debt-to-equity of 0.31x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to GD?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For General Dynamics Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Aerospace & Defense trends, then discounting those amounts to today's dollars. GD's ROIC of 10.8% shows moderate capital returns.
How does WACC affect GD stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For GD, with a debt-to-equity ratio of 0.31x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 16.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See GD PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value GD with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.