GEHC

Based on a comprehensive analysis of GEHC, here is an assessment of whether the stock is worth buying.

Technical Analysis The stock exhibits robust momentum, having significantly outperformed the market over the past three months. While a recent minor pullback is normal after such a strong advance, it is trading comfortably above its 52-week low. Overall, the technical picture suggests healthy consolidation rather than a trend reversal.

Fundamental Analysis GEHC shows solid revenue growth, but profitability is facing slight pressure from increased expenses. The company maintains a manageable debt level, indicating financial stability. However, operational efficiency metrics like ROE and asset turnover are modest, suggesting room for improvement in utilizing its assets.

Valuation & Risk Valuation is a primary concern, with the negative PEG ratio and high EV/EBITDA pointing to potential overvaluation given current earnings growth expectations. The stock's above-average beta also means it carries higher volatility risk, making it more susceptible to market swings than the broader index.

Investment Recommendation While GEHC demonstrates strong relative strength and revenue growth, its expensive valuation and modest profitability metrics present headwinds. The stock is likely better suited for investors with a higher risk tolerance who are bullish on the company's long-term prospects in the healthcare sector. More conservative investors may want to wait for a more attractive entry point or clearer signs of improved earnings growth. This is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for GEHC:

GE HealthCare's (GEHC) outlook is supported by strong revenue growth and its stable position in the essential healthcare technology sector, but its advancement will likely be tempered by valuation concerns. Key catalysts include the continued execution of its growth strategy and potential for improved operational efficiency to boost profitability. The primary risks are its elevated valuation metrics, which make it vulnerable to a de-rating if earnings growth disappoints, and its higher volatility compared to the broader market. Given the lack of a specific analyst target and the current overvaluation, achieving significant upside from the $84.77 price will be challenging; a more realistic target range for the next 12 months might be $80 - $95, contingent on demonstrating improved earnings power.

Wall Street Consensus

Most Wall Street analysts are optimistic about GEHC's 12-month outlook, with consensus target around $85.30, indicating expected upside potential.

Overall, GEHC has investment potential but also faces challenges. Here are key factors to weigh before investing.

GEHC has demonstrated strong multi-month outperformance despite recent minor consolidation.

The stock declined 1.49% over the past month but posted an impressive 14.21% gain over three months, significantly outperforming the market by 10.84% during that period, indicating robust relative strength amid recent volatility. This short-term pullback appears relatively modest given the substantial preceding advance and the stock's above-average beta of 1.229.

Trading at $84.77, GEHC sits approximately 45% above its 52-week low but remains about 11% below its annual high, positioning it in the upper-mid range of its yearly spectrum. Having recovered significantly from its maximum drawdown of -37.15%, the stock is not in oversold territory but may face resistance approaching its yearly peak.

Revenue & Profitability GEHC demonstrates solid revenue growth with Q3 2025 revenue reaching $5.14 billion, up from $5.01 billion in Q2. However, profitability metrics show slight pressure as the net profit margin declined from 9.71% to 8.67% quarter-over-quarter, primarily due to increased tax expenses affecting bottom-line performance despite stable operating margins.

Financial Health The company maintains a conservative debt structure with a debt ratio of 29.7% and interest coverage of 5.9x, indicating manageable leverage. Operating cash flow coverage remains adequate, though the cash flow to debt ratio of 0.055 suggests debt repayment capacity could be strengthened through improved cash generation.

Operational Efficiency GEHC's operational efficiency shows moderate performance with an ROE of 4.46% and asset turnover of 0.14, reflecting challenges in efficiently leveraging its asset base. The 62-day cash conversion cycle indicates reasonable working capital management, though inventory turnover of 1.37 suggests potential for improvement in inventory optimization.

Valuation Level

GEHC's valuation metrics present a mixed picture. The trailing P/E of 17.3 and forward P/E of 19.2 appear reasonable on the surface, but the alarmingly low and negative PEG ratio of -2.54 suggests the market has significant concerns about the company's future earnings growth potential. Furthermore, the extremely high EV/EBITDA of 45.4 indicates that the enterprise value is very expensive relative to its core operational cash flow, a sign of potential overvaluation. The Price-to-Sales ratio of 1.96 is not exceptionally high, but the Price-to-Book ratio of 3.95 shows the stock trades at a substantial premium to its net asset value.

Peer Comparison

A direct comparison to industry averages is not possible as the specific data was unavailable. However, the negative PEG ratio is a significant red flag that typically indicates a stock is overvalued relative to its projected growth rate, especially when compared to a positive industry average. The high EV/EBITDA multiple would also likely be well above the medical equipment industry norm, reinforcing the conclusion that GEHC is richly valued compared to its peers.

Of course. Here is a risk analysis for GEHC based on the provided metrics.

1. Volatility Risk GEHC exhibits above-average market risk, as evidenced by its Beta of 1.229, indicating it is approximately 23% more volatile than the broader market. This elevated volatility is further confirmed by a significant one-year maximum drawdown of -37.15%, highlighting substantial peak-to-trough loss potential for investors during market downturns. Consequently, the stock may be unsuitable for risk-averse investors seeking stable returns.

2. Other Risks While the absence of notable short interest suggests a lack of prevalent negative speculative sentiment, this does not eliminate fundamental or company-specific risks. Investors should still scrutinize factors such as the company's execution in its spin-off from GE, competitive pressures in the healthcare technology sector, and overall market liquidity, which can impact entry and exit points. These elements represent ongoing risks that merit careful monitoring alongside quantitative metrics.