General Dynamics (GD) is back in the spotlight after reporting fourth quarter 2025 earnings per share of $4.17, which exceeded consensus expectations. The results were supported by strong Marine Systems performance and a reported backlog of $178.94 billion in future work.

On the back of the earnings beat, General Dynamics’ share price has climbed to $364.78, with a 1-day share price return of 2.17% and a 90-day share price return of 8.63%. The 1-year total shareholder return of 46.36% points to strong, building momentum supported by its sizeable backlog.

If the strength in defense demand has your attention, it could be a good time to broaden your search and check out 23 power grid technology and infrastructure stocks as another way to find potential infrastructure related opportunities.

With the share price near analyst targets and an intrinsic value estimate implying a similar range, the key question now is whether General Dynamics still offers upside or if the market is already pricing in future growth.

Most Popular Narrative: 7.5% Undervalued

At $364.78, General Dynamics is trading below the most widely followed fair value estimate of $394.53, which is built using a 7.67% discount rate and detailed long term assumptions.

Robust multi-year order intake and record backlog, largely driven by increased global defense spending and rising geopolitical instability, provide strong visibility into future revenue growth across key segments, especially Marine and Aerospace.

Curious what underpins that fair value gap? The narrative leans on steady top line expansion, healthier margins, and a future earnings multiple that is anything but conservative. The full breakdown shows how those ingredients are stitched together into that $394.53 figure.

Result: Fair Value of $394.53 (UNDERVALUED)

However, that fair value gap depends on defense budgets and contract flow holding up, and on supply chain or execution issues not eroding the margin story.

Next Steps

If this all sounds optimistic, now is a good moment to check the numbers yourself and decide how you feel about General Dynamics. To round out your view, take a look at 5 key rewards.

Looking for more investment ideas?

If General Dynamics has sharpened your interest, do not stop here. Use the Simply Wall St Screener to spot other opportunities that match your investing style.

• Target potential bargains by scanning our list of 45 high quality undervalued stocks that pair quality fundamentals with prices that may not fully reflect their underlying strength.
• Strengthen the core of your portfolio by focusing on companies in the solid balance sheet and fundamentals stocks screener (41 results) that prioritize resilient finances and disciplined capital management.
• Add a different source of returns by reviewing 13 dividend fortresses, which highlights companies offering higher yields alongside a focus on sustainability.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.