Published: Wednesday, October 22, 2025 · 5:53 PM | Updated: Wednesday, October 22, 2025 · 5:53 PM
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GE Vernova shares are under pressure despite reporting a strong set of earnings and robust backlog growth. Members should view the pullback as a buying opportunity. Revenue for the three months ended September 30 increased 12% year over year to $9.97 billion, topping expectations of $9.16 billion, according to LSEG. Organically, revenue increased 10%, crushing the 2% Street estimate, according to FactSet Orders increased 55% organically to $14.6 billion, driven by strong demand for power and electrification solutions. As a reminder, analysts focus on orders to gauge demand, versus sales, which could be the result of fulfilling past orders. Adjusted earnings per share (EPS) hit $1.64, exceeding the $1.62 estimate, LSEG data showed. GE Vernova Why we own it : The company has several powerful secular tailwinds going in its favor, including the need for more reliable power and electrification, especially as AI drives up demand for energy-intensive data centers. GE Vernova may also become a beneficiary of deals as countries work with the Trump administration to reduce bilateral trade deficits. Competitors : Siemens Energy , MHI Most recent buy : Oct. 7, 2025 Initiated : May 13, 2025 Bottom line Management delivered on the most important line items. In addition to better-than-expected revenue and earnings results, the energy equipment manufacturing and services company also reported strong organic revenue growth, adjusted EBITDA margin expansion in every segment, and robust cash flow results. Most important for long-term investors, GE Vernova’s backlog expanded 15% year over year to more than $135 billion as the company took in nearly $15 billion in new orders. The backlog is a key focus because it speaks most directly to current demand. Whereas sales include the fulfillment of previously recorded orders (orders received in prior quarters), the backlog speaks to new orders received in the quarter. A growing backlog also indicates that orders are being taken more quickly than they can be fulfilled, and therefore provides additional transparency on future orders. In addition to solid earnings results, management on Tuesday announced the acquisition of the remaining 50% of its Prolec GE JV, a move that should enhance growth and bolster profitability. GE Vernova will pay $5.275 billion, funded with equal parts cash and debt, and the transaction is expected to close by the middle of next year. “Prolec will further strengthen our capabilities in the grid equipment market, primarily for transformers in North America, but also over time beyond North America, accelerating the growth trajectory of our fastest-growing segment, electrification,” CEO Scott Strazik said on the post-earnings call with investors. He added that the acquisition is immediately accretive to EBITDA before synergies, with management targeting annualized cost savings synergies of $60 to $120 million by 2028. The business is immediately accretive thanks to its 25% adjusted EBITDA margin, which, once integrated into GE Vernova, should raise the overall adjusted EBITDA margin, currently at 8.1%. An expectation for low double-digit revenue growth in the coming years means that the acquisition should also serve to accelerate the company’s overall topline growth rate once fully integrated. Prolec is also cash flow positive and management expects to maintain a healthy balance sheet, with CFO Ken Parks noting on the call that the company’s debt to adjusted EBITDA should remain below 1, despite taking on additional debt The move also looks smart in the context of President Donald Trump’s trade war. Strazik said five of Prolec’s seven manufacturing sites are in the US, and the one in Mexico is USMCA compliant; the last one is in Brazil. “While GE Vernova sells transformers internationally, this joint venture sells almost all of its volume to US customers and is the exclusive way we deliver transformers into North America,” Strazik said. Despite the strong results, GE Vernova is caught up in the sell-off of the more speculative areas of the energy trade — think no-profit nuclear plays — with shares falling as much as 7% Tuesday. Jim Cramer encourages investors to wait until tomorrow to start buying the stock, which is when the Club may start buying as well. We reiterate our One rating and $700 price target. GEV 1Y mountain GE Vernova 1-year return Guidance Management reaffirmed its outlook for the year, targeting full-year revenue at the higher end of its range of $36 to $37 billion. The team’s EBITDA margin target remains 8% to 9%, with free cash flow guidance of between $3 and $3.5 billion. Segment guidance was adjusted as follows: Power: Reaffirmed outlook for 6% to 7% organic revenue growth with EBITDA margin of 14% to 15%. Wind: The team now expects an organic revenue decline in the high single-digit range (versus mid-single-digit range previously). The team is also now expecting segment EBITDA loss to be roughly $400 million, down from the previous estimate of $200 to $400 million. Electric: Now targeting organic revenue growth of approximately 25% (up from 20% previously). Segment EBITDA margin is now expected to be between 14% and 15% (up from 13% and 15% previously). Segment results Power: Revenue growth was driven by strong demand for heavy-duty gas turbine equipment, services volume growth, and price hikes. Orders increased 50% organically to $7.8 billion, driven by higher volumes on higher-priced goods, with 20 heavy-duty gas turbines secured (four more units than secured in the year-ago period), 13 of which were high-efficiency, air-cooled units (four more than secured in the year-ago period). EBITDA of $596 million as the EBITDA profit margin expanded to 140 basis points (120 bps organic). Wind: Revenue decline was due primarily to “the nonrecurrence of the settlement of a previously canceled offshore wind project in the third quarter of 2024.” Orders increased 4% organically to $1.8 billion as an increase in onshore wind services revenue more than offset a decline in onshore wind equipment sales. EBITDA was negative but significantly better than the year-ago period as the segment’s EBITDA margin expanded 870 bps year over year (1,070 bps organically). Electrification: Revenue growth was driven by increases in prices and volume. On the release, management highlighted strong customer demand for grid equipment in the Middle East, North America, and Europe. Orders surged 102% organically, thanks to continued robust demand for grid equipment. EBITDA of $322 million benefits from margin expansion of 470 bps year over year (+550 bps organic). (Jim Cramer’s Charitable Trust is long GEV. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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