Prestack inversion with point‐source plane‐layer modeling has many advantages over poststack or normal incidence inversion. For example, it permits the determination of absolute compressional and shear velocities, density variations, and the accurate accounting of interbed and surface multiples. I neglect shear effects in this paper by assuming that they are adequately suppressed by velocity filtering. In the forward modeling step, a spherical wave expansion into plane waves is used to account for the point source. The plane‐wave reflection response for a set of plane layers is extended to the nonnormal incidence case. I use a Hankel transform to account for cylindrical symmetry. Generalized linear inversion is used because the fast recursive approaches available for normal incidence inversion are no longer applicable. I provide the derivation for the required derivative matrix, and I take into account the band‐limited nature of the data in frequency, time, and space. I demonstrate that moveout of events on realistic simulated prestack data enables the determination of absolute compressional velocity in the velocity‐depth profile, even though the data are band‐limited in frequency. I assume that preprocessing has adequately removed the shear and surface effects and that density is constant. Low frequencies in the velocity profile may be obtained more accurately than with velocity analysis used for stacking, because interbed multiples and other modeling phenomena are accounted for in the computation. Autoregressive modeling procedures that predict into the low frequencies of the velocity profile are also less accurate and cannot generate absolute velocity. I suggest future research leading to cost‐effective inversion of real data.