General Electric Profitability Analysis

GE
 Stock
  

USD 67.55  0.01  0.0148%   

For General Electric profitability analysis, we use financial ratios and fundamental drivers that measure the ability of General Electric to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well General Electric utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between General Electric's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of General Electric over time as well as its relative position and ranking within its peers. Please check Risk vs Return Analysis.
  
Is General Electric's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of General Electric. If investors know General will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about General Electric listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of General Electric is measured differently than its book value, which is the value of General that is recorded on the company's balance sheet. Investors also form their own opinion of General Electric's value that differs from its market value or its book value, called intrinsic value, which is General Electric's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because General Electric's market value can be influenced by many factors that don't directly affect General Electric's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between General Electric's value and its price as these two are different measures arrived at by different means. Investors typically determine General Electric value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, General Electric's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

General Electric Price to Sales vs. Beta Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining General Electric's current stock value. Our valuation model uses many indicators to compare General Electric value to that of its competitors to determine the firm's financial worth.
General Electric is one of the top stocks in beta category among related companies. It is one of the top stocks in price to sales category among related companies fabricating about  0.85  of Price to Sales per Beta. The ratio of Beta to Price to Sales for General Electric is roughly  1.18 . Comparative valuation analysis is a catch-all model that can be used if you cannot value General Electric by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for General Electric's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the General Electric's earnings, one of the primary drivers of an investment's value.

General Price to Sales vs. Beta

Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrument to the financial market in which this instrument is traded. For example, if Beta of equity is 2, it will be expected to significantly outperform market when the market is going up and significantly underperform when the market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns over time.
General Electric 
Beta 
 = 
Covariance 
Variance 
1.07
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.
Price to Sales ratio is typically used for valuing equity relative to its own past performance as well as to performance of other companies or market indexes. In most cases, the lower the ratio, the better it is for investors. However, it is advisable for investors to exercise caution when looking at price-to-sales ratios across different industries.
General Electric 
P/S 
 = 
MV Per Share 
Revenue Per Share 
0.91 X
The most critical factor to remember is that the price of equity takes a firm's debt into account, whereas the sales indicators do not consider financial leverage. Generally speaking, Price to Sales ratio shows how much market values every dollar of the company's sales.

General Electric Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in General Electric, profitability is also one of the essential criteria for including it into their portfolios because, without profit, General Electric will eventually generate negative long term returns. The profitability progress is the general direction of General Electric's change in net profit over the period of time. It can combine multiple indicators of General Electric, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
General Electric Company operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. General Electric Company was incorporated in 1892 and is headquartered in Boston, Massachusetts. General Electric operates under Specialty Industrial Machinery classification in the United States and is traded on New York Stock Exchange. It employs 168000 people.

General Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on General Electric. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of General Electric position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the General Electric's important profitability drivers and their relationship over time.

Use General Electric in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if General Electric position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in General Electric will appreciate offsetting losses from the drop in the long position's value.

General Electric Pair Trading

General Electric Pair Trading Analysis

The ability to find closely correlated positions to General Electric could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace General Electric when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back General Electric - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling General Electric to buy it.
The correlation of General Electric is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as General Electric moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if General Electric moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for General Electric can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your General Electric position

In addition to having General Electric in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Companies providing management services to businesses. The Management theme has 40 constituents at this time.
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Please check Risk vs Return Analysis. Note that the General Electric information on this page should be used as a complementary analysis to other General Electric's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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To fully project General Electric's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of General Electric at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include General Electric's income statement, its balance sheet, and the statement of cash flows.
Potential General Electric investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although General Electric investors may work on each financial statement separately, they are all related. The changes in General Electric's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on General Electric's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.