Generac Holdings (GNRC) AI Stock Analysis

• Market Cap: $9.19B
• Dividend Yield: N/A
• Average Volume (3M): 942.76K
• Price to Earnings (P/E): 30.0
• Beta (1Y): 1.07
• Revenue Growth: 5.52%
• EPS Growth: 9.03%
• Country: US
• Employees: 5,389
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.83
• Shares Outstanding: 58,684,067
• 10 Day Avg. Volume: 791,132
• 30 Day Avg. Volume: 942,763
• PEG Ratio: 0.44
• Price to Book (P/B): 3.70
• Price to Sales (P/S): 2.15
• P/FCF Ratio: 15.27
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 2.53
• Enterprise Value/Gross Profit: 6.42
• Enterprise Value/Ebitda: 17.42
• 1Y Price Target: $207.33
• Price Target Upside: 31.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 8.11
• Revenue Forecast (FY): $4.72B

• Rating: 59 Neutral
• Price Target: $165.00 ▲(4.63% Upside)

Generac Holdings' overall stock score reflects a combination of mixed financial performance, bearish technical indicators, and a high valuation. The company's strong profitability and growth in the commercial and industrial sectors are offset by declining residential sales and reduced sales outlook. The technical analysis indicates bearish momentum, and the high P/E ratio suggests potential overvaluation. The earnings call highlighted both opportunities and challenges, contributing to a cautious outlook.

Positive Factors

Commercial & Industrial Growth

The growth in commercial and industrial sales, driven by telecom and industrial channels, indicates strong market demand and diversification beyond residential products.

Data Center Market Expansion

The expansion in the data center market with increased backlog suggests a robust demand for Generac's products, positioning the company well in a growing sector.

International Sales Increase

Growth in international sales, particularly in Europe and Australia, highlights Generac's expanding global footprint and potential for further market penetration.

Negative Factors

Decline in Residential Sales

A significant decline in residential sales reflects vulnerability to external factors like power outage frequency, impacting overall revenue stability.

Overall Net Sales Decline

The decline in net sales indicates challenges in maintaining growth momentum, potentially affecting long-term revenue and profitability.

Lower Free Cash Flow

Reduced free cash flow due to higher inventory levels and lower operating income could strain liquidity and limit investment in growth opportunities.

Generac Holdings Business Overview & Revenue Model

Company Description

Generac 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 Money

Generac 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 Financial Statement Overview

Summary

Generac Holdings demonstrates a mixed financial performance. Despite a decline in revenue growth, the company maintains strong profitability with healthy margins. The balance sheet reflects moderate stability with manageable leverage, though ROE has decreased. Cash flow generation has weakened, raising potential liquidity concerns, but significant free cash flow is still being generated.

Income Statement

Generac Holdings shows a mixed performance in its income statement. The TTM data reveals a decline in revenue growth rate at -1.34%, indicating a contraction in sales compared to previous periods. However, the company maintains a healthy gross profit margin of 39.45% and a net profit margin of 7.19%, reflecting strong cost management and profitability. The EBIT and EBITDA margins are also solid at 10.23% and 14.54%, respectively, suggesting efficient operational performance. Despite the recent revenue decline, the company has demonstrated resilience in maintaining profitability.

Balance Sheet

The balance sheet of Generac Holdings reflects moderate financial stability. The debt-to-equity ratio stands at 0.60, indicating a balanced approach to leveraging. The return on equity (ROE) is 12.30%, which is reasonable but shows a decline from previous years, suggesting reduced efficiency in generating returns on shareholders' equity. The equity ratio is 47.23%, indicating a solid equity base relative to total assets. Overall, the balance sheet shows a stable financial position with manageable leverage, though there is room for improvement in ROE.

Cash Flow

Generac Holdings' cash flow statement presents some challenges. The free cash flow growth rate has declined by 24.95% in the TTM period, indicating potential issues in cash generation. The operating cash flow to net income ratio is 0.41, suggesting that cash flow from operations is not fully covering net income, which could be a concern for liquidity. However, the free cash flow to net income ratio is relatively strong at 88.65%, indicating that the company is still generating significant free cash flow relative to its net income. While cash flow generation has weakened, the company remains capable of generating free cash flow.

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	1.72B	1.67B	1.37B	1.52B	1.36B	957.65M
EBITDA	632.91M	670.92M	554.53M	719.43M	816.52M	547.96M
Net Income	312.87M	325.26M	203.09M	350.27M	533.39M	349.33M
Balance Sheet
Total Assets	5.60B	5.11B	5.09B	5.17B	4.88B	3.24B
Cash, Cash Equivalents and Short-Term Investments	300.01M	281.28M	200.99M	132.72M	147.34M	655.13M
Total Debt	1.42B	1.48B	1.73B	1.60B	1.32B	1.07B
Total Liabilities	2.95B	2.61B	2.74B	2.80B	2.61B	1.78B
Stockholders Equity	2.64B	2.49B	2.34B	2.26B	2.21B	1.39B
Cash Flow
Free Cash Flow	512.96M	604.57M	392.61M	-27.67M	301.16M	424.40M
Operating Cash Flow	588.17M	741.30M	521.67M	58.52M	411.16M	486.53M
Investing Cash Flow	-181.48M	-208.71M	-178.06M	-134.23M	-817.29M	-124.09M
Financing Cash Flow	-324.54M	-448.83M	-277.14M	64.04M	-102.97M	-30.43M

Generac Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 157.70
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 157.7 is above the 20-day moving average (MA) of 145.07, above the 50-day MA of 151.19, and above the 200-day MA of 152.75, indicating a bullish trend. The MACD of -0.29 indicates Negative momentum. The RSI at 59.19 is Neutral, neither overbought nor oversold. The STOCH value of 93.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GNRC.

Generac Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DCI	79 Outperform	$11.07B	30.21	24.96%	1.28%	2.37%	-6.93%
SPXC	77 Outperform	$10.39B	45.03	12.76%	―	12.60%	24.02%
IEX	75 Outperform	$13.95B	29.61	12.21%	1.56%	7.09%	-2.29%
RRX	69 Neutral	$10.10B	39.83	3.89%	0.97%	-4.99%	22.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	59 Neutral	$9.19B	30.02	12.38%	―	5.52%	9.03%
LASE	41 Neutral	$48.70M	-1.69	-109.15%	―	176.99%	-30.97%