A strong stock as of late has been General Dynamics (GD). Shares have been marching higher, with the stock up 10.8% over the past month. The stock hit a new 52-week high of $387.69 in the previous session. General Dynamics has gained 13.4% since the start of the year compared to the 1.9% move for the Zacks Aerospace sector and the 0.4% return for the Zacks Aerospace - Defense industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 29, 2026, General Dynamics reported EPS of $4.1 versus consensus estimate of $3.68.
For the current fiscal year, General Dynamics is expected to post earnings of $16.66 per share on $55.16 in revenues. This represents a 7.76% change in EPS on a 4.97% change in revenues. For the next fiscal year, the company is expected to earn $18.32 per share on $57.63 in revenues. This represents a year-over-year change of 9.98% and 4.46%, respectively.
Valuation Metrics
Though General Dynamics has recently hit a 52-week high, what is next for General Dynamics? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
General Dynamics has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 22.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22.9X. On a trailing cash flow basis, the stock currently trades at 20.1X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 2.3. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, General Dynamics currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if General Dynamics meets the list of requirements. Thus, it seems as though General Dynamics shares could have potential in the weeks and months to come.
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This article originally published on Zacks Investment Research (zacks.com).