Generac (GNRC): Assessing Valuation After Recent Share Price Volatility

Generac Holdings (GNRC) has recently seen increased attention as its stock continues to move. This has led many investors to re-evaluate the company’s current valuation and business outlook. Shares have experienced meaningful fluctuations this month, sparking conversations about potential opportunities.

See our latest analysis for Generac Holdings.

Generac’s share price has faced some turbulence lately, with a significant 1-month share price return of -21.84% weighing on investor sentiment after a period of relative stability earlier this year. While the 1-year total shareholder return is down 21.84%, the company’s 3-year total return still reflects notable growth. This indicates that momentum has faded recently but hasn’t erased earlier gains.

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With shares currently trading at a steep discount to analyst price targets, but recent growth stalling, investors are left to ask: is Generac undervalued at these levels, or is the market already factoring in everything ahead?

Most Popular Narrative: 29% Undervalued

Generac’s most widely followed narrative sees its shares as trading well below fair value after the recent selloff. With the narrative fair value set at $209.59 and the last close at $148.82, there is a substantial gap worth attention, especially as both momentum and analyst expectations evolve.

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 more than $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 demand beyond 2027.

Read the complete narrative.

Want to know what is powering this bullish narrative? Strong top-line growth, ambitious expansion, and a profit trajectory that could change the game are all on the table. Which of these levers drives the dramatic price target? Click to uncover the assumptions that make this forecast stand out.

Result: Fair Value of $209.59 (UNDERVALUED)

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

However, there remain important risks, including weak home standby demand and unpredictability in major power outages, that could quickly challenge even the most bullish view.

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

Build Your Own Generac Holdings Narrative

If you want to dive deeper, challenge the consensus, or investigate your own angle on Generac, you can easily build your own narrative in just a few minutes. Do it your way

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

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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.

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