GNRC Stock Overview
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.
Generac Holdings Inc. Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$178.68|
|52 Week High||US$524.31|
|52 Week Low||US$167.11|
|1 Month Change||-20.01%|
|3 Month Change||-22.41%|
|1 Year Change||-55.90%|
|3 Year Change||113.12%|
|5 Year Change||263.99%|
|Change since IPO||1,291.59%|
Recent News & Updates
Generac Holdings (NYSE:GNRC) Has A Pretty Healthy Balance Sheet
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...
Cowen initiates Generac at outperform on attractive valuation
Generac (NYSE:GNRC) shares gained 2% premarket on Friday after Cowen initiated coverage on the stock with an "Outperform" rating and price target of $229. In initiating coverage, Cowen analysts said: "We see attractive entry as valuation - the stock currently trades at 13.5x NTM P/E which is in-line with its pre-2H20 historical average - will be the primary driver in determining investor appetite going forward. With ~75%-80% share of the Residential Home Standby Generator generator market, Generac is the clear industry leader in a market that still has growth potential given its ~5.5% penetration rate. Additionally, we believe a slowdown in the housing market and continued macro uncertainty is currently priced in." SA Quant system rates the stock as "Hold", while SA Authors rate it as "Buy." Recently, CFRA upgraded Generac to Strong Buy on generator demand GNRC shares have plunged more than 57% over the past year Generac (GNRC) shares are "fundamentally sound and undervalued, trading near support, making it a good buy," InvestOhTrader writes in a bullish analysis posted recently on Seeking Alpha.
Generac: On Track To Power Up A Smarter World
Summary Generac Holdings Inc.'s top-line growth and operating margins began to improve, challenging its profitability risk. Generac has a better outlook for its gross margin, which supports the notion of positive margin recovery. Enhanced portfolio through numerous acquisitions without deteriorating capital structure. Benefits from an improved Solar Tax Credit, which may boost the company's residential product. Generac Holdings Inc. stock is fundamentally sound and undervalued, trading near support, making it a good buy. The effects of climate change can be seen in many different ways and to name a few, it affects our food supply through extreme weather and leads to power outages. Generac Holdings Inc. (GNRC) can use this catalyst as an opportunity to grow further, making it well-positioned to capitalize on today’s mega-trend in climate change. I wrote about GNRC in April 2021 when the stock was just trading around $320 and materialized to hit an all-time high of $524ish that year. Upon revisiting this stock, GNRC is heavily beaten by the market, but the good thing is that it remains fundamentally strong, which unlocks a good buy opportunity today. Pressured Residential Products One of the problems I see is fear from GNRC's slowing residential products growth. GNRC: Slowing Growth On Its Residential Product (Source: Company Filings. Prepared by InvestOhTrader. Amounts are in millions) Considering today's tightening consumer budget due to rising inflation and no material government stimulus check to spend, this could explain GNRC's slowing growth. However, as shown in the image above, it has improved sequentially for the third consecutive quarter, indicating some recovery, making this stock more appealing. Pressured Margin GNRC: Pressured Operating Margin Trend (Source: Data from SeekingAlpha. Prepared by InvestOhTrader) GNRC was beaten up due to its slowing margin; inflationary pressures and shortages snowballed into 5 consecutive quarters of declining operating margin from Q1 2021 to Q1 2022. However, this quarter, it generated a better figure on a quarter-over-quarter basis, making this stock attractive again in light of its continued margin recovery, as shown in the image above. Powering a Smarter World After a few months since my last analysis on GNRC, it has since entered into numerous acquisitions. To name a few, the company acquired a controller manufacturer, Deep Sea, in June 2022; Chilicon, a leading grid-interactive microinverter, in July 2021; Off Grid Energy in September 2021; ecobee Inc., a leading smart home solutions provider, in December 2021; and recently, Electronic Environments Co. LLC, an industrial generator provider and expert in telecom and IT infrastructure, in June 2022. These acquisitions helped GNRC grow its top line, as mentioned before. However, on top of the supply shortages and inflationary pressure, the company seems to have a problem integrating its acquisition, as shown in its slowing operating margin. This is visible in its rising total operating expense ratio, as shown in the image below. GNRC: Rising Total Expense Ratio (Source: Data from SeekingAlpha. Prepared by InvestOhTrader) This is probably an aggressive move for the company, especially with today's uncertainties; however, these acquisitions and continued capacity expansion make me believe that GNRC is still well-positioned for a positive recovery in the next few years. Additionally, it continues to seek opportunities in natural gas generators and control systems through partnerships, enhancing its Commercial & Industrial capabilities. As part of "Powering a Smarter World," GNRC has robust human resource growth. According to the management, they have around 10,000 employees globally with 8,200 residential dealer partners, which can support its growing demand. Lastly, despite the aggressive acquisition, the company maintained a healthy capital structure and produced an improving debt-to-equity ratio of 0.62x, which is lower than its 5-year average of 0.93x. Growing SAM GNRC has been growing steadily over the years, and thanks to its multiple acquisitions, it now has a growing addressable market estimated to grow to $72 billion in 2025. According to the management, the growth comes mainly from clean energy and the continued trend toward electrification of everything. The management also saw continued growth from its home standby generator. According to them, in 2021, their penetration rate is just about 5.5% of the total addressable market of homes in the US. I believe the company can drive penetration further, especially with its improving capacity and boosts from the Inflation Reduction Act, where U.S. residents can be eligible for solar tax credits for installing solar panels. In fact, according to the management, GNRC has the industry's broadest residential clean energy portfolio. GNRC: Residential Clean Energy Product Portfolio (Source: Company’s Investor Presentation) In fact, according to the management, they have more capacity and are more efficient than their peers. GNRC: Better PWRCELL (Source: Company’s Investor Presentation) Tesla, Inc. (NASDAQ:TSLA), SolarEdge Technologies, Inc. (NASDAQ:SEDG), Enphase Energy, Inc. (NASDAQ:ENPH). Undervalued GNRC: Relative Valuation (Source: Data from SeekingAlpha. Prepared by InvestOhTrader) Tesla, Inc., SolarEdge Technologies, Inc., Enphase Energy, Inc., Honeywell International Inc. (HON). GNRC remains undervalued and trades at an improving P/E multiple of 23.71x, which is now below its 31.22x 5 year average. By excluding GNRC from the first quartile computation to arrive at a more conservative figure, as shown in the image above, we can see that it is undervalued compared to its peers in the residential power space. GNRC trades at appealing earnings multiples that are undervalued in comparison to its historical figure of 31.22x and its peers' multiple of 45.95x.
Estimating The Fair Value Of Generac Holdings Inc. (NYSE:GNRC)
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Generac Holdings Inc...
|GNRC||US Electrical||US Market|
Return vs Industry: GNRC underperformed the US Electrical industry which returned -16.4% over the past year.
Return vs Market: GNRC underperformed the US Market which returned -18.2% over the past year.
|GNRC Average Weekly Movement||8.7%|
|Electrical Industry Average Movement||10.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: GNRC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: GNRC's weekly volatility (9%) has been stable over the past year.
About the Company
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.
Generac Holdings Inc. Fundamentals Summary
|GNRC fundamental statistics|
Is GNRC overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|GNRC income statement (TTM)|
|Cost of Revenue||US$2.92b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||7.84|
|Net Profit Margin||11.27%|
How did GNRC perform over the long term?See historical performance and comparison