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Generac Holdings (GNRC)
NYSE:GNRC
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Generac Holdings
(NYSE:GNRC)
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Rating:60Neutral
Price Target:
$236.00
▲(0.35% Upside)
Action:ReiteratedDate:02/17/26
Overall score reflects pressured recent profitability and volatile cash flow (largest constraint), partially offset by constructive 2026 guidance and strengthening C&I/data-center demand. Technicals show a strong uptrend but look overextended, while valuation is a notable headwind due to the high P/E and no dividend support.
Positive Factors
C&I / data-center momentum
Generac has built durable momentum in commercial & industrial, with a ~$400M data-center backlog and management targeting ~30% C&I growth in 2026. Strong structural demand from hyperscalers and co-locators can underpin multi-year volume growth and higher-utilization, improving fixed-cost absorption and revenue diversification.
Capacity expansion to serve larger markets
Material investment in manufacturing — including an added Wisconsin facility and plans to exceed $1B domestic capacity — positions Generac to convert backlog and scale C&I/data-center supply. Expanded capacity reduces execution bottlenecks, supports double-digit C&I growth targets, and is a durable enabler of higher margin volume.
Manageable leverage and positive cash generation
Balance sheet scale and manageable leverage (debt roughly $1.5B vs ~$2.6B equity) coupled with historically positive operating and free cash flow provide financial flexibility. This supports capex for capacity, buybacks, and strategic M&A without immediate refinancing pressure, assuming margins and cash conversion stabilize.
Negative Factors
Profitability compression
Net margin erosion is structural risk: margins dropped sharply versus prior years, reflecting pressures below gross profit (higher opex, one-offs, mix). Sustained lower margins reduce reinvestment capacity, ROIC and buffer against shocks; recovery requires durable cost discipline or meaningful revenue mix shift to higher-margin C&I.
Volatile and declining free cash flow
Free cash flow fell materially and has been volatile, undermining predictability for capex, debt reduction and returns. Variability driven by working-capital swings and one-time provisions raises execution risk when funding large capacity builds and potential hyperscaler ramps that require upfront investment before steady cash conversion.
Residential cyclicality & hyperscaler execution risk
Generac’s residential revenue is highly sensitive to outage cycles and policy swings, making near-term recovery uncertain. Simultaneously, hyperscaler and large-data-center opportunities remain pilots with conversion timing uncertain, so significant C&I upside is contingent on execution and contracting risk over the next 2–3 years.
Generac Holdings (GNRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.80B
Dividend YieldN/A
Average Volume (3M)1.28M
Price to Earnings (P/E)87.5
Beta (1Y)0.93
Revenue Growth5.52%
EPS Growth9.03%
CountryUS
Employees5,389
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.61
Shares Outstanding58,675,827
10 Day Avg. Volume1,768,060
30 Day Avg. Volume1,282,772
Financial Highlights & Ratios
PEG Ratio-1.00
Price to Book (P/B)3.03
Price to Sales (P/S)1.90
P/FCF Ratio29.77
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.53
Enterprise Value/Gross Profit9.23
Enterprise Value/Ebitda31.92
Forecast
1Y Price Target
$238.69Price Target Upside1.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)8.41
Revenue Forecast (FY)$4.85B
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 makes money primarily through the sale of its generators and energy products, which are sold through a broad network of distributors, retailers, and direct sales channels. The company generates significant revenue from residential products, particularly home standby generators, which are increasingly popular among homeowners seeking reliable power during outages. Additionally, Generac earns revenue from commercial and industrial sectors through larger scale generator solutions and energy management systems. The company also benefits from recurring revenue streams through service contracts, maintenance, and parts sales. Strategic partnerships with retailers, utility companies, and contractors enhance its market reach and contribute to sales growth. Furthermore, the rising demand for clean energy solutions has opened new avenues for Generac's energy storage and management products, further diversifying its revenue streams.
Generac Holdings Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyGenerac Holdings Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call highlighted meaningful strategic progress: accelerating momentum in the C&I/data-center market (10% C&I growth in Q4, $400M backlog, pilot relationships with hyperscalers), major capacity investments (domestic capacity to surpass $1B), strong product innovation and ecobee momentum, and a constructive 2026 guidance (mid‑teens revenue growth and higher EBITDA margin). Offsetting these positives were a weak outage environment that depressed residential sales in Q4 (residential -23%, home standby shipments -25%), significant one-time charges in Q4 (≈$120M combined inventory and product liability provisions) that drove a GAAP loss and weaker cash flow, and uncertainty around when large hyperscaler orders will convert from pilots to firm contracts. On balance, the positives — including visible backlog, capacity expansion, product launches, and optimistic 2026 guidance — outweigh the near-term operational and one-time financial headwinds, suggesting constructive upside as execution on hyperscaler contracts and residential recovery materialize.Q4-2025 Updates
Positive Updates
Strong C&I Momentum and Backlog
Global commercial & industrial (C&I) product sales grew 10% year-over-year in Q4 to $400M (from $363M). Company backlog for data center products increased to approximately $400M, with the majority expected to ship in 2026. Management expects C&I product sales to grow in the +30% range in 2026, and sees a path to doubling C&I sales over the next 3–5 years driven by data center demand.
Progress with Hyperscalers and Strategic Partnerships
Advanced partnerships with multiple hyperscalers progressed to pilot phases (two specific customers), creating incremental visibility for potential significant volumes in 2027–2028 and the possibility of orders in 2026. Company strengthened relationships with co-locators and is a preferred supplier to two co-locators.
Capacity Expansion for Large Megawatt Generators
Purchased an additional manufacturing facility in Wisconsin and invested in existing C&I facilities; expect domestic manufacturing capacity for large megawatt generators to surpass $1.0B by Q4 2026 (up from prior capacity levels). Management indicates additional global capacity beyond the domestic $1.0B figure.
New Product Introductions and Ecosystem Growth
Launched multiple innovations in 2025, including large megawatt generators, next-generation home standby (first 28 kW air-cooled unit), PWRcell 2 energy storage, and PowerMicro microinverter. Ecobee connected-home count grew to ~5 million residences and ecobee generated record net sales for the full year with positive EBITDA contribution for 2025.
International Margin Expansion
International core total sales increased (Q4 +5% ex-FX) and International adjusted EBITDA margin expanded to a record 16.1% in Q4 (up from 12.0% prior-year quarter). Full-year International sales increased 7% and full-year International adjusted EBITDA margin improved to 15.1% (from 13.2%).
2026 Financial Outlook with Revenue and EBITDA Growth
Company initiated 2026 guidance calling for consolidated net sales to increase mid-teens year-over-year, residential net sales to grow ~+10%, C&I net sales to grow ~+30%, and adjusted EBITDA margin to increase to ~18%–19% (from 17% in 2025). At the midpoint, management expects ~25% increase in EBITDA dollars in 2026 vs 2025.
Capital Allocation and Balance Sheet Actions
Repurchased ~1.11M shares for $148M in 2025 and the Board approved a new $500M repurchase authorization. Total debt ended Q4 at $1.33B with gross debt leverage ~1.9x, inside target gross leverage range of 1.0–2.0x adjusted EBITDA.
Resilient Residential Capability and Dealer Expansion
Residential dealer network grew to over 9,400 dealers (≈+300 dealers YoY). New lead distribution system showed promising early results during Winter Storm Fern, improving dealer connection rates and lead conversion in elevated demand scenarios.
Negative Updates
Overall Sales and Residential Declines in Q4
Consolidated net sales decreased 12% year-over-year in Q4 to $1.1B (from $1.2B). Residential product sales declined 23% in Q4 to $572M (from $743M), driven by a continued soft power outage environment and a 25% decline in home standby shipments versus a strong prior-year quarter.
One-Time Charges and Inventory Provisioning
Q4 operating expenses included a $104.5M provision for settlement of a portable generator product liability matter and a $15.6M net inventory provision related to settlement of a supplier contract dispute; these items materially impacted GAAP results in the quarter.
GAAP Net Loss and Earnings Decline
GAAP net loss for Q4 was $24M vs. GAAP net income of $117M in the prior-year quarter. Adjusted net income fell to $95M ($1.61 per share) from $168M ($2.80 per share) year-over-year for the quarter.
Adjusted EBITDA and Margin Contraction
Adjusted EBITDA (before noncontrolling interest) decreased to $185M (17.0% of net sales) in Q4 from $265M (21.5%) in the prior-year quarter. Full-year adjusted EBITDA was $716M (17.0%) vs $789M (18.4%) prior year.
Reduced Cash Flow and Free Cash Flow
Cash flow from operations in Q4 decreased to $189M from $339M a year earlier. Free cash flow in Q4 fell to $130M from $286M; full-year free cash flow decreased to $268M from $605M in 2024 (driven in part by lack of prior-year net working capital release and lower operating income).
Near-term Residential Energy Storage Headwind
Shipments of energy storage systems were strong in 2025 due to DOE program in Puerto Rico, but with the DOE program winding down in early 2026, energy storage shipments are expected to decrease in 2026, creating a near-term revenue headwind for the energy technology category.
Uncertainty Around Hyperscaler Orders and Supply Risk
Hyperscaler engagements are at pilot stages with limited orders currently in backlog (pilot units only); meaningful hyperscaler purchase orders are not yet contracted and thus represent upside but also execution risk. Management also noted the need to ensure supply-chain readiness despite factory capacity adds.
Gross Margin Pressure in Q4 and Elevated Input Costs
Gross profit margin declined to 36.3% in Q4 from ~40.6% prior year, driven by unfavorable sales mix, inventory provision, higher input costs, and lower manufacturing absorption (partially offset by price realization). Guidance expects gross margins roughly flat in 2026 (38%–39%) with Q1 ~36% as a seasonal low.
Company Guidance
Generac initiated 2026 guidance calling for consolidated net sales to grow at a mid‑teens rate (includes ~1% net benefit from foreign currency and recent M&A), with residential sales up roughly +10% (home standby expected to grow mid‑teens driven half by price and half by volume), C&I product sales up ~+30% (Allmand contributing ~25% of that C&I growth) and other products down ~10%; seasonal weighting ~46% of sales in H1 and ~54% in H2, and Q1 sales expected +11–13%. Gross margin is guided to be roughly flat versus 2025 at ~38–39% for the year (Q1 ~36% low point; second half ~39%), adjusted EBITDA margin before noncontrolling interest ~18–19% (vs 17% in 2025) with Q1 ~15% and second half ~20% (midpoint implies ~25% growth in EBITDA dollars year‑over‑year). Cash‑flow and expense metrics include free cash flow of about $350 million for 2026, capital spending ~3.5% of sales, depreciation ~$104–108 million, intangible amortization ~ $18 million, stock‑based compensation $54–58 million, interest expense $65–69 million (assuming no term‑loan prepayments), a GAAP effective tax rate of ~24–25%, and a weighted average diluted share count of ~59.5–60.0 million; guidance assumes a baseline outage environment and excludes potential incremental impacts from future M&A or share repurchases.Generac Holdings Financial Statement Overview
Summary
Balance sheet and liquidity appear reasonably solid (manageable leverage and generally positive free cash flow), but the core issue is a clear profitability downshift and uneven revenue trend, with 2025 margin compression and lower free cash flow versus 2024.Income Statement
Revenue has been choppy, with a modest decline in 2025 (-3.3%) after a small increase in 2024. Profitability has compressed meaningfully versus 2020–2021 levels: net margin fell to ~3.8% in 2025 from ~7.6% in 2024 and ~14% in 2020–2021, and operating profit also stepped down versus prior years. A positive is that gross margin remains relatively steady (~38% in 2024–2025), suggesting the bigger pressure is below the gross profit line rather than product pricing alone.56
Neutral
Balance Sheet
Leverage looks manageable: debt is about $1.5B against ~$2.6B of equity in 2025, and equity has grown over time (from ~$1.4B in 2020 to ~$2.6B in 2025). Total assets have also expanded, indicating balance sheet scale and reinvestment. The main weakness is weakening profitability relative to the equity base (lower recent earnings), which reduces financial flexibility if the lower-margin environment persists.64
Positive
Cash Flow
Cash generation is generally solid, with positive operating cash flow and free cash flow in most years, including 2025 (~$438M). Cash flow improved markedly from 2022, when free cash flow was negative. However, 2025 free cash flow declined versus 2024 (down ~14.6%), and cash generation has been volatile across the period, which raises uncertainty around consistency through the cycle.62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.21B | 4.30B | 4.02B | 4.56B | 3.74B |
| Gross Profit | 1.61B | 1.67B | 1.37B | 1.52B | 1.36B |
| EBITDA | 484.03M | 670.92M | 554.53M | 719.43M | 816.52M |
| Net Income | 159.55M | 325.26M | 203.09M | 350.27M | 533.39M |
Balance Sheet | |||||
| Total Assets | 5.57B | 5.11B | 5.09B | 5.17B | 4.88B |
| Cash, Cash Equivalents and Short-Term Investments | 341.41M | 281.28M | 200.99M | 132.72M | 147.34M |
| Total Debt | 1.33B | 1.48B | 1.73B | 1.60B | 1.32B |
| Total Liabilities | 2.93B | 2.61B | 2.74B | 2.80B | 2.61B |
| Stockholders Equity | 2.63B | 2.49B | 2.34B | 2.26B | 2.21B |
Cash Flow | |||||
| Free Cash Flow | 268.13M | 604.57M | 392.61M | -27.67M | 301.16M |
| Operating Cash Flow | 437.98M | 741.30M | 521.67M | 58.52M | 411.16M |
| Investing Cash Flow | -172.90M | -208.71M | -178.06M | -134.23M | -817.29M |
| Financing Cash Flow | -212.72M | -448.83M | -277.14M | 64.04M | -102.97M |
Generac Holdings Technical Analysis
Positive
235.17
Price Trends
170.52
Positive
168.16
Positive
163.24
Positive
Market Momentum
18.75
Negative
78.08
Negative
90.00
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 235.17 is above the 20-day moving average (MA) of 198.22, above the 50-day MA of 170.52, and above the 200-day MA of 163.24, indicating a bullish trend. The MACD of 18.75 indicates Negative momentum. The RSI at 78.08 is Negative, neither overbought nor oversold. The STOCH value of 90.00 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 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $12.33B | 33.31 | 24.96% | 1.28% | 2.37% | -6.93% | |
77 Outperform | $15.50B | 32.20 | 12.35% | 1.56% | 7.09% | -2.29% | |
76 Outperform | $12.11B | 51.85 | 12.76% | ― | 12.60% | 24.02% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $14.88B | 52.00 | 4.27% | 0.97% | -4.99% | 22.16% | |
60 Neutral | $13.80B | 87.51 | 6.22% | ― | 5.52% | 9.03% | |
43 Neutral | $25.43M | -0.66 | -109.15% | ― | 176.99% | -30.97% |
* Industrials Sector Average
GNRC
Generac Holdings
235.17
96.03
69.02%
DCI
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106.88
38.62
56.58%
IEX
IDEX
208.45
15.66
8.12%
RRX
Regal Rexnord
223.69
90.24
67.63%
SPXC
SPX
243.04
91.83
60.73%
LASE
Laser Photonics Corp.
0.85
-2.65
-75.71%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.