Generac Holdings (GNRC) AI Stock Analysis

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Generac Holdings

(NYSE:GNRC)

Rating:67Neutral

Price Target:―

Generac Holdings demonstrates a strong financial performance with stable cash flows and solid profitability. The earnings call confirmed revenue growth and margin expansion, though tariffs and economic uncertainties pose risks. Technically, the stock shows bearish trends, and valuation remains moderate without significant appeal. Overall, the stock is positioned as a solid performer with some caution due to external challenges.

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 Strategy

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

Tariff and macro uncertainties have led to a decrease in revenue and EBITDA estimates for FY25 and FY26.

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

$7.62B

Dividend YieldN/A

Average Volume (3M)916.80K

Price to Earnings (P/E)22.2

Beta (1Y)1.65

Revenue Growth8.07%

EPS Growth58.67%

CountryUS

Employees5,389

SectorIndustrials

Sector Strength90

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)1.26

Shares Outstanding59,081,650

10 Day Avg. Volume822,121

30 Day Avg. Volume916,799

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

$153.07

Price Target Upside24.58% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering18

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 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 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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price122.87

Price Trends

50DMA

121.05

Positive

100DMA

134.37

Negative

200DMA

148.82

Negative

Market Momentum

MACD

2.54

Negative

RSI

51.95

Neutral

STOCH

61.23

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 122.87 is above the 20-day moving average (MA) of 120.19, above the 50-day MA of 121.05, and below the 200-day MA of 148.82, indicating a neutral trend. The MACD of 2.54 indicates Negative momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 61.23 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 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNR	78 Outperform	$16.59B	26.00	18.59%	0.95%	-0.42%	3.23%
WTS	78 Outperform	$8.23B	28.22	17.61%	0.70%	3.89%	8.17%
DOV	77 Outperform	$25.26B	11.10	17.45%	1.11%	-5.86%	59.79%
AOS	70 Outperform	$10.02B	19.72	27.97%	1.90%	-1.60%	-7.12%
RRX	68 Neutral	$9.37B	40.26	3.69%	1.00%	-10.19%	―
GNRC	67 Neutral	$7.62B	22.16	14.29%	―	8.07%	58.67%
Sector *	64 Neutral	$4.46B	11.94	5.17%	249.36%	4.00%	-12.35%

* Industrials Sector Average

Performance Comparison

GNRC

Generac Holdings

122.87

-28.92

-19.05%

DOV

Dover

178.92

-6.62

-3.57%

PNR

Pentair

97.33

14.14

17.00%

RRX

Regal Rexnord

134.66

-22.18

-14.14%

AOS

A. O. Smith Corporation

67.12

-16.40

-19.64%

WTS

Watts Water Technologies

238.02

26.09

12.31%

Generac Holdings Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 8.50%|

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.

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.