GE Vernova's Backlog Hit $197 Billion and the Stock Fell Anyway. Here's What a $10,000 Investment Could Be Worth by 2030.

GE Vernova's backlog of orders reached $197 billion by the end of Q3, potentially surpassing the $200 billion mark that CEO Scott Strazik sees as a crucial milestone for long-term growth. The company's revenue is forecasted to be relatively predictable, driven by services from its expanding gas turbine and electrical equipment installations and sales.

By 2030, GE Vernova's services revenue should generate around $79.3 billion, with $13.1 billion in free cash flow (FCF), resulting in a price-to-FCF multiple of 14.9. An investment of $10,000 could potentially be worth $13,420 by 2030, assuming the company's growth prospects remain steady.

However, if investors consider the value of the long-term revenue streams generated by installed gas turbines, the stock could be undervalued, offering an even greater return. Should GE Vernova secure orders at their current pace, the stock could trade closer to a 25x FCF multiple, making a $10,000 investment worth approximately $16,778 by 2030. This represents a substantial undervaluation of around 67.8%.

The company's backlog of services revenue is expected to be recognized within five years, and a significant portion of equipment backlog is anticipated to be recognized within a year. This means that GE Vernova's revenue is relatively predictable, and recent political events are unlikely to significantly impact the company's order trends. Analysts recommend considering this stock for potential investment, as it may outperform the market.