General Dynamics Corporation (GD) Stock Valuation — PE Analysis
Aerospace & Defense · NYSE
Current Price
$380.83
PE Ratio (TTM)
22.9x
Intrinsic Value
$439.65
+13.4% margin of safety
COMPETITIVE MOAT
↑Dominant Marine Shipbuilding
GD's Electric Boat division holds a near-monopoly in U.S. nuclear submarine construction. This deep backlog and specialized expertise create immense switching costs for the Navy.
↑Long-Term Government Contracts
The company benefits from multi-year, high-value contracts with defense departments. These predictable revenue streams and established relationships are difficult for competitors to replicate.
↑Integrated Defense Solutions
GD offers a broad portfolio of defense products and services, from land systems to aerospace. This integrated approach provides a one-stop shop for government needs, fostering customer loyalty.
INVESTMENT RISKS
↓Supply Chain Disruptions
Complex defense manufacturing relies on a global supply chain. Disruptions due to geopolitical events or material shortages can impact production schedules and costs.
↓Program Cost Overruns
Large, complex defense projects are prone to cost overruns. Significant overruns on key programs could negatively impact profitability and investor sentiment.
↓Competition from Lockheed Martin
While GD has a strong marine position, Lockheed Martin is a formidable competitor across the broader aerospace and defense landscape, vying for similar government contracts.
Base case
GD base case PE valuation
At a current price of $380.83, the base case PE valuation puts GD fair value near $439.65 per share. That figure assumes 8.7% yearly earnings growth, a target PE multiple of 23x, and a 10% discount rate.
Intrinsic Value
$439.65
Margin of safety
+13.4%
Expected annual return
+2.9%
Base case assumptions: 8.7% annual earnings growth, 23x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
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)
22.9x
PEG Ratio
2.20
Earnings Yield
4.36%
ROE (TTM)
17.4%
Revenue/Share (TTM)
$203.04
Dividend Yield
1.62%
Debt/Equity
0.28x
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 22.9x combined with a PEG ratio of 2.20 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. 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 (22.9x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (2.20) 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 2.20, calculated by dividing the PE ratio (22.9x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. 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 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.