A Look at Generac Holdings’s Valuation After Lowered Sales Forecast and Weaker Third Quarter Results

Generac Holdings (GNRC) delivered some unwelcome news for investors, lowering its 2025 sales growth forecast to flat after initially predicting growth of up to 5%. This move comes in addition to softer third quarter results and mounting market pressures.

See our latest analysis for Generac Holdings.

After a tough stretch, Generac’s recent lowered outlook and quarterly dip have clearly rattled sentiment. The stock’s 90-day share price return of -21% reflects those mounting headwinds. A one-year total shareholder return of -18% signals momentum has been fading despite a strong three-year run. Investors are watching closely to see if these challenges will mark a turning point or a temporary setback.

If you’re weighing what might outperform in a shifting market, now is a perfect time to broaden your search and discover fast growing stocks with high insider ownership

With the stock down sharply, a price below most analyst targets, and longer-term outperformance still in the rearview mirror, the key question becomes whether shares are set up for a rebound or if weak fundamentals are now fully reflected, leaving limited upside for new investors.

Most Popular Narrative: 25.9% Undervalued

Generac Holdings currently trades at $155.29, while the most followed narrative points to a fair value of $209.59. This difference highlights the optimistic undercurrents running beneath the recent share price decline. Here is a crucial catalyst straight from that narrative:

Accelerating demand for backup power solutions in data centers driven by AI adoption and global digitalization has resulted in a structural supply deficit for large commercial generators. Generac's rapid entry and over $150 million backlog position it to capture significant revenue growth and operating leverage over the next several years, with further potential upside as the company expands capacity to address 2027+ demand.

Read the complete narrative.

Wondering what aggressive growth targets and profit margin steps are powering this bullish stance? The answer involves ambitious earnings leaps, expanding operating leverage, and an industry transformation fueled by AI and infrastructure reinvestment. The full narrative breaks down just how bold these projections get and where the real upside lies.

Result: Fair Value of $209.59 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, weak demand for home standby generators and a contracting residential solar market remain real risks that could challenge Generac's positive long-term outlook.

Find out about the key risks to this Generac Holdings narrative.

Build Your Own Generac Holdings Narrative

If the prevailing analysis doesn't match your outlook or you want to dig into the numbers yourself, you can build a custom perspective and Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Generac Holdings.

Looking for More Smart Investment Opportunities?

Don’t settle for the obvious. Give yourself an edge by targeting sectors where big potential is unfolding right now with these tailored screening tools:

• Find income stability and reliable yield as you scan for high-potential holdings with these 16 dividend stocks with yields > 3%.
• Stay on the forefront of AI breakthroughs by reviewing companies shaping tomorrow’s technology with these 25 AI penny stocks.
• Unearth overlooked value and tap into tomorrow’s winners by screening for the market’s best bargains using these 876 undervalued stocks based on cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com