General Dynamics Corporation (GD) Stock Valuation — PE Analysis
Aerospace & Defense · NYSE
Current Price
$360.22
PE Ratio (TTM)
22.4x
Intrinsic Value
$382.66
+5.9% 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 PE valuation
A base case PE valuation for GD estimates a fair value of about $382.66 per share, against a current price of $360.22. The model assumes 7.0% annual earnings growth, a 22x target PE multiple, and a 10% discount rate.
Intrinsic Value
$382.66
Margin of safety
+5.9%
Expected annual return
+1.2%
Base case assumptions: 7.0% annual earnings growth, 22x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the GD PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for General Dynamics Corporation respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
22.4x
PEG Ratio
2.14
Earnings Yield
4.46%
ROE (TTM)
17.4%
Revenue/Share (TTM)
$199.14
Dividend Yield
1.69%
Debt/Equity
0.31x
Frequently Asked Questions
What is the PE ratio of GD?
The trailing twelve-month PE ratio of GD reflects how much investors pay per dollar of General Dynamics Corporation's earnings. This metric is most useful when compared to Aerospace & Defense peers and the company's own historical range.
Is GD overvalued based on PE ratio?
GD's PE of 22.4x combined with a PEG ratio of 2.14 provides a growth-adjusted perspective. A PEG above 2.0 suggests GD may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Aerospace & Defense, a DCF analysis may be more appropriate.
How do I value GD stock using PE ratio?
To value General Dynamics Corporation using PE: (1) Compare the current PE (22.4x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (2.14) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of GD?
GD's PEG ratio is 2.14, calculated by dividing the PE ratio (22.4x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for GD stock valuation?
PE ratio gives a quick relative read — how GD is priced versus Aerospace & Defense peers. DCF provides an absolute value based on projected free cash flows. For GD, with a strong ROE of 17.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See GD DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value GD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.