General Electric (NYSE:GE) was once the largest company in the world, ranked by market capitalization. It has taken a long slide since then, including a further dip earlier this week, when an earnings release sparked a nearly 6% decline in its stock price. With the stock at its lowest level in more than 11 months, does GE finally present a buying opportunity?
The Once (And Probably Not Future) King
It's unlikely that GE will regain its one-time glory. Starting in 1993, the industrial conglomerate stood as the largest company in the world by market cap until surpassed by Microsoft in 1998. It would regain its crown at times during the early 2000s, as the tech crash wounded some of its up-and-coming tech competitors.
At its peak, around the turn of the 21st century, GE boasted a market cap of more than $500B. These days, it sits at less than one-fifth of that level, with a current figure around $100B -- or about 1/26th the size of current market-cap leader Apple. You can see the long slide in this chart.
What's more, GE's strategy for the future involves getting smaller. Last November, the company announced a plan to split into three publicly traded companies. Once it breaks out its healthcare and energy and digital businesses, the remaining GE will become a trim, concentrated aviation-focused company.
Is GE a Buy?
GE has obviously long set aside plans of world domination. But does the current iteration of the stock represent a buying opportunity?
The latest earnings report gave investors some pause. Soft guidance included in its Q4 report sent the stock lower by about 6% on Tuesday.
Since then, the stock has touched an intraday low of $88.05, its lowest level since early February 2021. The stock remains just off a 52-week low of $85.12, but it could establish a fresh yearly low just by lapping some of its weaker prints of early 2021. Meanwhile, the stock traded below $50 at times during 2020.
In fact, since mid-2016, the stock has dramatically underperformed the broader market. Shares have slipped about 63% since that point, compared to a nearly 129% rise in the S&P 500, as you can see in this chart.
Taking a more forward-looking approach, Seeking Alpha's Quant Ratings view the stock as a solid Hold. The firm gets grades in the A range for growth and profitability. However, even at these levels, the valuation sits at a dismal D-.
Turning to the Wall Street community, experts have a rosier view of the company's future. Of the 21 analysts surveyed by Seeking Alpha, 15 give GE a rating of Strong Buy or Buy. The other six have a neutral stance, lending the stock a Hold rating.
For more details on GE's future, read a deep dive by SA contributor Daniel Jones, who sees the stock as a strong buying opportunity despite what he considers a "disappointing" quarter. Balance that with a view from On the Pulse, which refers to GE as "dead money."