Value
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.2 |
| P/S | 9.0 |
| EV/EBITDA | 1.7 |
| Fwd P/E | 6.0 |
| PEG | 3.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 21.4x
- ▸PEG: 2.87
GD · Why this verdict
Why General Dynamics (GD) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
General Dynamics has delivered four consecutive earnings beats with strong cash conversion and positive momentum, but the stock has moved above its technical resistance target with a reward-to-risk ratio that has flipped negative — the fundamentals remain intact while the price setup favors patience over new capital commitment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Four consecutive quarters above consensus with an average positive earnings surprise of 5.5% and free cash flow running at 122% of net income demonstrate disciplined execution and a business that converts its earnings into actual cash at above-par rates. Earnings | The beat streak extends to at least 6 consecutive quarters while free cash flow conversion stays above 100% of net income, confirming the execution pattern is durable. | →Stable |
| CounterThe average beat size of 5.5% is modest, and a forward P/E of 19.8x with a PEG of 2.67 implies the market has already priced in reliable delivery — any stumble would be disproportionately penalized at this multiple. | ||
The stock holds above its 200-day moving average with rising volume accumulation and a MACD trending positively — a momentum configuration consistent with institutional accumulation and a trend that remains intact. Momentum breakdown | Price sustains above the 200-day moving average for at least 6 consecutive months while volume accumulation continues, confirming the trend has not reversed. | ↑Improving |
| CounterThe stock is within 2.8% of its 52-week high with limited technical buffer below — any single negative catalyst at current extended positioning could push it back through key support levels. | ||
With approximately 70% of revenues tied to a single customer, the business faces concentrated customer dependency risk — any disruption to contract flows from that customer would have an outsized impact on top-line results. Bear case | This risk is falsified if government-sourced revenue as a share of total falls below 60% through commercial diversification disclosed in a subsequent annual filing. | ↓Deteriorating |
| CounterThe same concentration provides a predictable, contracted revenue base that underpins the consistent earnings beat pattern and free cash flow generation — concentrated customers can represent durable, long-duration relationships. | ||
The stock has moved above its technical resistance target and now offers essentially no upside at current prices of $359.53, with a reward-to-risk ratio of -0.19-to-1 — the price geometry no longer supports adding capital at these levels. Price targets | A pullback of more than 5% from current prices, or a meaningful upward revision to analyst price targets, would be needed before the setup becomes favorable for new buyers. | Tripped↓Deteriorating |
| CounterSustained momentum and a Piotroski financial health score of 7 out of 9 could attract continued institutional flows that keep the stock near resistance without requiring a correction before the next catalyst. | ||
Four consecutive quarters above consensus with an average positive earnings surprise of 5.5% and free cash flow running at 122% of net income demonstrate disciplined execution and a business that converts its earnings into actual cash at above-par rates.
→StableEarnings
- Expectation
- The beat streak extends to at least 6 consecutive quarters while free cash flow conversion stays above 100% of net income, confirming the execution pattern is durable.
CounterThe average beat size of 5.5% is modest, and a forward P/E of 19.8x with a PEG of 2.67 implies the market has already priced in reliable delivery — any stumble would be disproportionately penalized at this multiple.
The stock holds above its 200-day moving average with rising volume accumulation and a MACD trending positively — a momentum configuration consistent with institutional accumulation and a trend that remains intact.
↑ImprovingMomentum breakdown
- Expectation
- Price sustains above the 200-day moving average for at least 6 consecutive months while volume accumulation continues, confirming the trend has not reversed.
CounterThe stock is within 2.8% of its 52-week high with limited technical buffer below — any single negative catalyst at current extended positioning could push it back through key support levels.
With approximately 70% of revenues tied to a single customer, the business faces concentrated customer dependency risk — any disruption to contract flows from that customer would have an outsized impact on top-line results.
↓DeterioratingBear case
- Expectation
- This risk is falsified if government-sourced revenue as a share of total falls below 60% through commercial diversification disclosed in a subsequent annual filing.
CounterThe same concentration provides a predictable, contracted revenue base that underpins the consistent earnings beat pattern and free cash flow generation — concentrated customers can represent durable, long-duration relationships.
The stock has moved above its technical resistance target and now offers essentially no upside at current prices of $359.53, with a reward-to-risk ratio of -0.19-to-1 — the price geometry no longer supports adding capital at these levels.
Tripped↓DeterioratingPrice targets
- Expectation
- A pullback of more than 5% from current prices, or a meaningful upward revision to analyst price targets, would be needed before the setup becomes favorable for new buyers.
CounterSustained momentum and a Piotroski financial health score of 7 out of 9 could attract continued institutional flows that keep the stock near resistance without requiring a correction before the next catalyst.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.0 |
| ROA | 4.0 |
| Gross margin | 0.0 |
| Op margin | 4.2 |
| Net margin | 4.0 |
| Current ratio | 5.2 |
| FCF quality | 9.1 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 122% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 4.4 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.3 |
| Analyst rating | 7.5 |
| Price target | 5.1 |
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $27,040,895 (0.026% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 7.4 |
| growth rank | 2.1 |
- ▸Attractive P/E vs peers
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.4 |
| 52w position | 9.9 |
Risk (lower is worse)
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 8.8 |
| volatility | 7.6 |
| put call | 9.8 |
| implied vol | 5.9 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 8.5 |
- ▸Above max pain $185
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.3 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 1 days
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $392.41 has reached target $386.49. No upside to wait for.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|SANITY:WAIT+price>=TPPassed (5)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.8=NEGATIVE
- EARNINGS_PROXIMITY:1d<=7d
Warning (0)
none
Reward-to-Risk
-0.77
Upside
-9.2%
Downside
12.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Downgraded from BUY WAIT — price $392.41 has reached target $386.49. No upside to wait for. The 10-dimension scores remain Risk (lower is worse) at 7.9 (strongest), but ASYMMETRY:-0.8=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Risk (lower is worse) at 7.9, Momentum at 6.7, and Catalyst at 6.7; the weakest are Technical at 3.4, Growth at 4.8, and Value at 4.9. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.77 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Execution Cash Flow
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Strong Momentum Profile
Trip ifStock closes below the 200-day moving average for more than 30 consecutive trading days.
- P3Government Revenue Concentration
Trip ifGovernment-sourced revenue falls below 60% of total revenue in a subsequent annual disclosure (currently approximately 70%).
- P4Price Above ResistanceTripped
Trip ifReward-to-risk ratio rises above 1.5-to-1 following a price pullback of more than 7% from the current $359.53 or a significant analyst target upgrade (currently -0.19-to-1).