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Generac Holdings (GNRC)
NYSE:GNRC
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Generac Holdings
(NYSE:GNRC)70Outperform
Positive Factors
Financial Performance
Generac reported a significant increase in demand for residential products, leading to record net sales, adjusted EBITDA, adjusted net income, and all-time quarterly free cash flow generation.
Market Position
Generac is positioned as a strong franchise with a 70% share in its core HSB market and opportunities for growth in the clean energy business with new products and partnerships.
Negative Factors
Commercial and Industrial Segment
Commercial and industrial sales are expected to be flat in 2025, indicating limited growth in this segment.
Generac Holdings (GNRC) vs. S&P 500 (SPY)
Market Cap
$7.75B
Dividend YieldN/A
Average Volume (3M)956.07K
Price to Earnings (P/E)24.3
Beta (1Y)2.06
Revenue Growth6.79%
EPS Growth64.30%
CountryUS
Employees9,239
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)5.40
Shares Outstanding59,614,025
10 Day Avg. Volume804,158
30 Day Avg. Volume956,073
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)N/A
Price to Sales (P/S)1.81
Price to Cash Flow (P/CF)5.70
P/FCF Ratio6.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$174.06Price Target Upside27.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Generac Holdings Business Overview & Revenue Model
Company DescriptionGenerac Holdings Inc. is a leading designer and manufacturer of a wide range of energy technology solutions, primarily focusing on power generation equipment and other engine-powered products. The company operates in various sectors including residential, light commercial, and industrial markets. Their core products include backup power generation systems, portable generators, and energy storage solutions, catering to both consumer and commercial needs across the globe.
How the Company Makes MoneyGenerac Holdings primarily generates revenue through the sale of its power generation equipment and energy technology solutions. Key revenue streams include residential standby generators, which are a significant part of their product lineup, and portable generators that are popular in both consumer and commercial sectors. Additionally, Generac offers maintenance services, parts, and accessories that contribute to its revenue. The company also capitalizes on strategic acquisitions to enhance its product offerings and expand its market presence, further driving sales. Partnerships with distributors and dealers globally help in maximizing their market reach and sales capabilities.
Generac Holdings Financial Statement Overview
Summary
Generac Holdings presents a robust financial profile with consistent revenue growth and strong cash flow generation. The company's stable margins and solid balance sheet indicate effective management and operational efficiency. While there is room for enhancing net profitability, the overall financial standing is strong, supported by manageable leverage and a sound equity position.Income Statement
Generac Holdings has demonstrated a solid revenue growth rate over the past year, with an increase from $4.02 billion to $4.30 billion, indicating strong market demand. The gross profit margin improved to 38.8%, reflecting efficient cost management. However, the net profit margin stands at 7.4%, suggesting room for profitability enhancements. EBIT and EBITDA margins have shown stability, with EBIT margin at 12.5% and EBITDA margin at 12.5%, pointing to effective operational performance, though slightly impacted by higher operational costs compared to previous years.75
Positive
Balance Sheet
The balance sheet of Generac Holdings reveals a stable financial position with a debt-to-equity ratio of 0.59, suggesting manageable leverage. The return on equity is 12.7%, indicating effective utilization of equity capital. The equity ratio is 48.8%, showcasing a balanced capital structure. However, the slight increase in total debt requires monitoring to ensure long-term sustainability.70
Positive
Cash Flow
Generac Holdings has exhibited strong cash flow management, with a remarkable increase in free cash flow from $392.61 million to $741.30 million, reflecting robust operational efficiency. The operating cash flow to net income ratio of 2.34 indicates a healthy conversion of income into cash. The free cash flow to net income ratio is strong at 2.34, underscoring ample cash generation to cover net income and support growth initiatives.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.30B | 4.02B | 4.56B | 3.74B | 2.49B | Gross Profit |
| 1.67B | 1.37B | 1.52B | 1.36B | 957.65M | EBIT |
| 536.74M | 386.20M | 566.33M | 721.14M | 479.11M | EBITDA |
| 670.92M | 553.26M | 723.93M | 834.64M | 549.29M | Net Income Common Stockholders |
| 316.31M | 203.09M | 350.27M | 533.39M | 349.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 281.28M | 200.99M | 132.72M | 147.34M | 655.13M | Total Assets |
| 5.11B | 5.09B | 5.17B | 4.88B | 3.24B | Total Debt |
| 1.48B | 1.73B | 1.74B | 1.32B | 1.07B | Net Debt |
| 1.19B | 1.53B | 1.61B | 1.17B | 410.02M | Total Liabilities |
| 2.61B | 2.74B | 2.80B | 2.61B | 1.78B | Stockholders Equity |
| 2.49B | 2.34B | 2.26B | 2.21B | 1.39B |
| Cash Flow | Free Cash Flow | |||
| 741.30M | 392.61M | -27.67M | 301.16M | 424.40M | Operating Cash Flow |
| 741.30M | 521.67M | 58.52M | 411.16M | 486.53M | Investing Cash Flow |
| -208.71M | -178.06M | -134.23M | -817.29M | -124.09M | Financing Cash Flow |
| -448.83M | -277.14M | 64.04M | -102.97M | -30.43M |
Generac Holdings Technical Analysis
Negative
136.58
Price Trends
148.62
Negative
162.33
Negative
155.09
Negative
Market Momentum
-5.17
Positive
43.27
Neutral
40.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GNRC, the sentiment is Negative. The current price of 136.58 is below the 20-day moving average (MA) of 139.14, below the 50-day MA of 148.62, and below the 200-day MA of 155.09, indicating a bearish trend. The MACD of -5.17 indicates Positive momentum. The RSI at 43.27 is Neutral, neither overbought nor oversold. The STOCH value of 40.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GNRC.
Generac Holdings Risk Analysis
Generac Holdings disclosed 31 risk factors in its most recent earnings report. Generac Holdings reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Generac Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $108.80B | 29.22 | 20.23% | 1.35% | 7.25% | 18.36% | |
74 Outperform | $65.60B | 27.67 | 9.66% | 1.81% | 10.29% | 22.72% | |
70 Outperform | $7.75B | 24.25 | 13.46% | ― | 6.79% | 64.30% | |
69 Neutral | $30.74B | 33.83 | 26.22% | 1.88% | -11.28% | -23.69% | |
68 Neutral | $137.06B | 24.27 | 33.10% | 2.09% | 5.05% | 2.73% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
54 Neutral | $25.20B | ― | -7.10% | ― | -0.76% | -55.03% |
* Industrials Sector Average
Performance Comparison
GNRC
Generac Holdings
136.58
20.03
17.19%
ETN
Eaton
284.98
-5.05
-1.74%
EMR
Emerson Electric Company
118.61
10.91
10.13%
HON
Honeywell International
214.52
18.39
9.38%
PHG
Koninklijke Philips
27.56
6.90
33.40%
ROK
Rockwell Automation
276.54
-3.02
-1.08%
Generac Holdings Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -3.64% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance across residential segments, driven by record sales and profitability. Despite notable achievements in innovation and financial metrics, challenges persist in the C&I and international segments, alongside potential tariff impacts. Overall, the positive aspects significantly outweighed the negatives.Highlights
Record-Breaking Financial Performance
Fourth quarter net sales increased 16% year-over-year to $1.23 billion, with residential product sales growing 28%. Adjusted EBITDA for the quarter was a record $265 million, or 21.5% of net sales.
Residential Product Sales Surge
Strong demand for home standby and portable generators drove residential product sales to a record $743 million in Q4, supported by a 28% increase from the prior year.
Innovation and New Product Launches
Introduced a next-generation line of home standby generators, including the industry's largest air-cooled generator with 28 kilowatts of output, expected to ship in the second half of 2025.
Ecobee Achieves Profitability
Ecobee delivered record sales and positive profitability in Q4 2024, with expectations of continued profitability throughout 2025.
Strong Free Cash Flow Generation
Q4 free cash flow was a record $286 million, with full-year 2024 free cash flow reaching an all-time high of $605 million.
Lowlights
Commercial and Industrial (C&I) Sales Flat
C&I product sales were approximately flat year-over-year at $363 million, with declines in rental and beyond standby end markets.
International Sales Decline
International segment sales decreased 1% in Q4 and 13% for the full year 2024, with softness in Europe offsetting strengths in Latin America.
Challenges in Rental Market
Shipments to rental equipment customers continued to decline, with expectations of continued softness in 2025 due to slow project activity.
Tariff and Cost Concerns
Potential impacts from new tariff actions are being evaluated, with plans to offset through cost reductions and pricing adjustments.
Company Guidance
During Generac Holdings Inc.'s earnings call for the fourth quarter of fiscal year 2024, the company provided comprehensive guidance for 2025. They anticipate a continued net sales growth of 3% to 7% year-over-year, driven primarily by higher residential product shipments, especially home standby generators, following increased power outage activity. The company expects gross margins to improve by approximately 100 basis points, reaching about 40%, despite potential tariff impacts. Adjusted EBITDA margins are projected to be between 18% to 19%, with significant sequential improvement throughout the year. The residential energy technology products are expected to experience strong double-digit growth, with net sales anticipated to reach $300 to $400 million. Generac also highlighted their strategic focus on energy ecosystems to address rising power costs and outages, aiming to enhance customer control over energy costs and availability.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.