For a while, Generac (NYSE:GNRC) was the place to turn for backup power. With a weakening power grid throughout the U.S. and particularly in California, customers were getting ready for the next blackout with Generac systems. After Generac’s latest earnings report, it’s clear there’s still plenty of interest, which Generac shares up over 15% at the time of writing.
Generac did quite well in its earnings report. It posted earnings of $0.63, which was nicely ahead of the $0.48 analysts expected. Further, revenue came in at $887.9 million, ahead of the $850.07 million analysts looked for. However, on something of a down note, the $887.9 million was actually down 22.1% against this time last year. While residential sales were down substantially—around 46%, in fact—commercial and industrial sales jumped by 30% to fill in much of the gap.
The major issue for Generac—despite its win—was clearly the major loss in home sales. CEO and president Aaron Jagdfeld noted that was largely due to an unfavorable comparison period. There was “…significant excess backlog for home standby products” back in 2022, Jadgfeld explained. That, coupled with an expansion of Generac’s distribution network, led to a loss of sales year-over-year.
Meanwhile, Wall Street is somewhat split on Generac’s overall outcome. Analyst consensus calls Generac stock a Moderate Buy, backed up by nine Buy ratings, eight Holds, and two Sells. Further, with an average price target of $142.39, Generact offers investors 19.6% upside potential.
