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Generac Holdings (GNRC)
NYSE:GNRC
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Generac Holdings
(NYSE:GNRC)
Rating:67Neutral
Price Target:―
Positive Factors
Financial Performance
Generac reported 1Q25 financials that beat both analyst and consensus estimates.
Market Position
Generac's leading market position in the domestic residential HSB category and its strong free cash flow profile are attractive attributes at current valuations.
Product Development
The rollout of Generac's large MW diesel genset offering is seen as positive, with orders opening and first shipments to international data centers expected.
Negative Factors
Economic Uncertainty
Guidance was tweaked lower to account for uncertainty around the economy and tariffs.
Pricing Concerns
Negative feedback is primarily centered around higher pricing for the residential HSB segment and concerns regarding consumer behavior moving forward.
Tariffs Impact
Generac anticipates a significant product cost headwind due to tariffs, particularly from materials sourced from China, which impacts the company's overall costs.
Generac Holdings (GNRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.52B
Dividend YieldN/A
Average Volume (3M)766.77K
Price to Earnings (P/E)22.2
Beta (1Y)1.64
Revenue Growth8.07%
EPS Growth58.67%
CountryUS
Employees5,389
SectorIndustrials
Sector Strength93
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.26
Shares Outstanding59,081,650
10 Day Avg. Volume631,326
30 Day Avg. Volume766,766
Financial Highlights & Ratios
PEG Ratio3.59
Price to Book (P/B)2.74
Price to Sales (P/S)0.00
P/FCF Ratio10.33
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$154.44Price Target Upside22.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Generac Holdings Business Overview & Revenue Model
Company DescriptionGenerac Holdings Inc. designs, manufactures, and sells power generation equipment, energy storage systems, and other power products for the residential, and light commercial and industrial markets worldwide. The company offers engines, alternators, batteries, electronic controls, steel enclosures, and other components. It also provides residential automatic standby generators ranging in output from 7.5kW to 150kW; air-cooled engine residential standby generators ranging from 7.5kW to 26kW; liquid-cooled engine generators with outputs ranging from 22kW to 150kW; and Mobile Link, a remote monitoring system for home standby generators. In addition, the company offers various portable generators ranging in size from 800W to 17.5kW; outdoor power equipment, such as trimmers, field and brush mowers, log splitters, stump grinders, chipper shredders, lawn and leaf vacuums, pressure washers, and water pumps; and clean energy solution under the PWRcell and PWRview brands. Further, it provides light towers, mobile generators, and mobile energy storage systems; commercial mobile pumps and dust-suppression equipment; various gaseous-engine control systems and accessories; light-commercial standby generators ranging from 22kW to 150kW and related transfer switches providing three-phase power for small and mid-sized businesses; and industrial generators ranging in output from 10kW to 3,250kW used as emergency backup for healthcare, telecom, datacom, commercial office, retail, municipal, and manufacturing markets. Additionally, the company sells aftermarket service parts and product accessories to dealers. It distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, electrical, HVAC and solar wholesalers, catalogs, equipment rental companies and distributors, and solar installers; and directly to end users. The company was founded in 1959 and is headquartered in Waukesha, Wisconsin.
How the Company Makes MoneyGenerac Holdings generates revenue primarily through the sale of its power products and solutions. The company's revenue model is centered around the manufacturing and distribution of a broad range of products, including residential, commercial, and industrial generators, energy storage solutions, and other energy technology products. Generac also earns revenue from its service offerings, which include installation, maintenance, and repair services for its products. Key revenue streams include sales to residential homeowners, commercial businesses, and industrial clients, as well as through partnerships with distributors, dealers, and retailers. Generac's earnings are bolstered by its strong brand reputation, extensive distribution network, and ongoing investments in research and development to innovate and expand its product offerings.
Generac Holdings Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 11.56%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
Generac reported strong revenue growth and gross margin expansion in the first quarter of 2025, driven by robust performances in home standby generators and residential energy technology. However, challenges were noted in the C&I segment and concerns over the impact of tariffs and economic uncertainty, leading to a cautious outlook for the remainder of the year.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Overall net sales increased 6% to $942 million for the quarter compared to the previous year, with residential product sales up 15%.
Home Standby Generators Performance
Home standby shipments increased at a mid-teens rate from the prior year, driven by strong demand due to elevated power outages.
Gross Margin Improvement
Gross margin expanded by nearly 400 basis points from the prior year to 39.5%, the highest first quarter gross margin since 2021.
Residential Energy Technology Success
ecobee showed robust sales growth with shipments across channels, and energy storage systems exceeded expectations due to the DOE program in Puerto Rico.
Debt and Share Repurchase
Interest expense declined, and the company repurchased approximately 717,000 shares of common stock for $97 million.
Negative Updates
Commercial and Industrial (C&I) Sales Decline
C&I product sales declined 5% year-over-year, with softness in domestic rental and certain international end markets.
Tariff Impact Concerns
Higher tariff levels are expected to increase product costs by approximately $125 million in the second half of 2025.
Economic Uncertainty
The widening of guidance ranges reflects potential impacts of more restrictive trade policy and a more cautious economic environment.
Free Cash Flow Decrease
Free cash flow decreased to $27 million compared to $85 million in the same quarter last year, primarily due to increased working capital.
Company Guidance
During the first quarter 2025 earnings call, Generac Holdings provided updated guidance reflecting a broader range of potential outcomes due to uncertainties in tariffs and economic conditions. The company expects consolidated net sales growth between 0%-7% for the full year, adjusting from the previous 3%-7% range. This reflects the potential impact of higher tariffs, with specific assumptions that tariffs on Chinese imports will remain at 145%, steel and aluminum tariffs at 25%, and reciprocal tariffs at 10% for the year. Despite these challenges, Generac anticipates maintaining adjusted EBITDA margins between 17%-19%, slightly reduced from the prior 18%-19% range, by implementing price increases and supply chain initiatives to offset tariff-related costs. The company also expects growth in residential product sales, driven by strong demand for home standby generators, and a cautious economic environment with no full recession anticipated.Generac Holdings Financial Statement Overview
Summary
Generac Holdings maintains a solid financial position with stable profitability and effective cash flow management. The company demonstrates consistent revenue growth and efficient operational performance, bolstered by a balanced leverage structure. While growth opportunities exist, the company should continue to monitor its debt levels to sustain long-term stability.Income Statement
Generac Holdings shows a stable revenue base with a TTM gross profit margin of 39.01% and a net profit margin of 7.68%. The company demonstrates a moderate revenue growth rate of 1.23% from the previous year. While the EBIT margin is 12.76%, indicating efficient operations, the EBITDA margin of 14.76% reflects consistent profitability. Overall, the income statement portrays a solid financial performance, though growth is modest.70
Positive
Balance Sheet
The balance sheet reveals a debt-to-equity ratio of 0.60, indicating a balanced leverage position. The company has an ROE of 13.52%, demonstrating decent returns on shareholders' equity. The equity ratio stands at 48.80%, suggesting a strong equity position relative to assets. While the company maintains a sound capital structure, the slightly high total debt level warrants attention.68
Positive
Cash Flow
Generac Holdings exhibits robust cash flow generation with a free cash flow growth rate of 9.34%. The operating cash flow to net income ratio is 2.06, and the free cash flow to net income ratio is 1.98, indicating strong cash conversion efficiency. The company effectively manages its cash flows, supporting operational stability and future investments.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.35B | 4.30B | 4.02B | 4.56B | 3.74B | 2.49B | Gross Profit |
| 1.70B | 1.67B | 1.37B | 1.52B | 1.36B | 957.65M | EBIT |
| 554.65M | 536.74M | 386.20M | 566.33M | 721.14M | 479.11M | EBITDA |
| 641.59M | 660.68M | 553.26M | 723.93M | 834.64M | 549.29M | Net Income Common Stockholders |
| 333.92M | 325.26M | 203.09M | 350.27M | 533.39M | 349.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 187.46M | 281.28M | 200.99M | 132.72M | 147.34M | 655.13M | Total Assets |
| 5.06B | 5.11B | 5.09B | 5.17B | 4.88B | 3.24B | Total Debt |
| 1.47B | 1.48B | 1.73B | 1.74B | 1.32B | 1.07B | Net Debt |
| 1.29B | 1.19B | 1.53B | 1.61B | 1.17B | 410.02M | Total Liabilities |
| 2.59B | 2.61B | 2.74B | 2.80B | 2.61B | 1.78B | Stockholders Equity |
| 2.47B | 2.49B | 2.34B | 2.26B | 2.21B | 1.39B |
| Cash Flow | Free Cash Flow | ||||
| 661.04M | 604.57M | 392.61M | -27.67M | 301.16M | 424.40M | Operating Cash Flow |
| 687.55M | 741.30M | 521.67M | 58.52M | 411.16M | 486.53M | Investing Cash Flow |
| -215.61M | -208.71M | -178.06M | -134.23M | -817.29M | -124.09M | Financing Cash Flow |
| -532.22M | -448.83M | -277.14M | 64.04M | -102.97M | -30.43M |
Generac Holdings Technical Analysis
Positive
126.33
Price Trends
119.45
Positive
131.09
Negative
147.87
Negative
Market Momentum
1.52
Positive
55.65
Neutral
86.80
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GNRC, the sentiment is Positive. The current price of 126.33 is above the 20-day moving average (MA) of 125.42, above the 50-day MA of 119.45, and below the 200-day MA of 147.87, indicating a neutral trend. The MACD of 1.52 indicates Positive momentum. The RSI at 55.65 is Neutral, neither overbought nor oversold. The STOCH value of 86.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GNRC.
Generac Holdings Risk Analysis
Generac Holdings disclosed 30 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $24.40B | 10.72 | 17.45% | 1.16% | -5.86% | 59.79% | |
79 Outperform | $8.04B | 27.58 | 17.61% | 0.76% | 3.89% | 8.17% | |
78 Outperform | $16.42B | 25.72 | 18.59% | 0.96% | -0.42% | 3.23% | |
72 Outperform | $9.02B | 38.75 | 3.69% | 1.03% | -10.19% | ― | |
70 Outperform | $9.09B | 17.90 | 27.97% | 2.09% | -1.60% | -7.12% | |
67 Neutral | $7.52B | 22.19 | 14.29% | ― | 8.07% | 58.67% | |
66 Neutral | $4.49B | 12.28 | 5.32% | 248.53% | 4.08% | -12.00% |
* Industrials Sector Average
Performance Comparison
GNRC
Generac Holdings
126.33
-13.70
-9.78%
DOV
Dover
177.24
1.12
0.64%
PNR
Pentair
99.71
22.19
28.62%
RRX
Regal Rexnord
138.42
-0.34
-0.25%
AOS
A. O. Smith Corporation
63.80
-15.61
-19.66%
WTS
Watts Water Technologies
240.79
53.46
28.54%
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.