I'm Officially Sounding the Alarm on GE Vernova: Here's What Investors Should Buy Instead
GE Vernova's business is booming, but its stock may be too expensive. Here's why Quanta Services looks like the better buy today.
Overview
Let me be clear up front: GE Vernova (NYSE: GEV) is a terrific business. Its power-generation and grid equipment sit at the heart of the electrification boom, and its record backlog is real. But the stock has become overvalued, and I am officially sounding the alarm. If you want exposure to the same powerful trend without the sky-high risk, I would buy Quanta Services (NYSE: PWR) instead.
Here's the specific problem: the price. GE Vernova trades near $1,071 a share (as of July 20), and against the average analyst forecast for 2027 earnings of about $24.40 per share, that works out to roughly 44 times forward earnings. The stock has soared more than 60% this year alone, and that kind of run leaves a valuation priced for perfection. When expectations get that stretched, even good news can fail to move the stock, while any disappointment tends to hit hard.
Image source: Getty Images.
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Originally published at www.fool.com.
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