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Generac (GNRC) is experiencing strong demand for its generators in North America, primarily fueled by the increasing need for backup power due to factors such as electric vehicles and AI data centers. Experts note that even a slight uptick in demand can lead to significant profit growth, supported by the company's substantial market share and the ongoing issues with power grid reliability. While some analysts express caution due to recent market pullback and decelerating growth, they acknowledge Generac's potential, as revenues could see a considerable lift from the expanded penetration of its products in the market. The company is viewed as having high cash flows and an appealing buyback yield, but the absence of dividends and a relatively high price-to-earnings ratio of 19 times forward earnings raises questions about its current valuation. Overall, the market for backup power generation appears ripe for growth, with ongoing weather-related outages underpinning demand.
We think it is a hold, although growth has been slow/declining and it is not cheap at 19x forward earnings. EPS is forecasted to grow at approximately ~20% annually for the next three years, so there is some appeal if GNRC can start consistently meeting/beating expectations. The risk is that it does not offer a safety net of any dividend, but GNRC does have a decent buyback yield at 3.51%. We do not think it is a must own, but it does have high cash flows and if revenue and earnings growth picks up it could look more attractive.
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80% of the North American market is owned by Generac. The market is about 6.5% penetrated. Every 1% increase in penetration increases revenues by about $6B to the industry, so you can do the math. Hurricanes and weather outages are what drive this company. Sees outages continuing as the grid deteriorates.
An interesting play on grid deterioration, and people taking matters into their own hands when you can't trust the local power company.
Demand for solar power and their stocks enjoy huge tailwings. ESG is one. Companies like Blackrock and Exxon Mobil are making ESG a serious priority, for example. Secondly, out electric grid is falling apart. Witness the Texas outage last winer. Third, new homeowners are happy to add solar panels to their roofs as prices of panels keep plunging. Fourth, governments are supporting solar panels more and more; for example, the federal government is offering tax credits, and Biden wants to extend the solar tax credit by 10 years. Also, Biden has slapped tariffs on foreign panels, and the American industry is divided over this. A few years ago they made acquisitions to store solar power energy. Stock looks pricey now, but the stock has quadrupled over 16 months. Buy a small position now. A great way to play solar energy.
Generac is a American stock, trading under the symbol GNRC-N on the New York Stock Exchange (GNRC). It is usually referred to as NYSE:GNRC or GNRC-N
In the last year, 2 stock analysts published opinions about GNRC-N. 1 analyst recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Generac.
Generac was recommended as a Top Pick by on . Read the latest stock experts ratings for Generac.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
2 stock analysts on Stockchase covered Generac In the last year. It is a trending stock that is worth watching.
On 2025-04-03, Generac (GNRC-N) stock closed at a price of $115.64.
Generators are in strong demand across North America. Small increase in demand for product will see large increases in profits. Backup power is more important now especially with EV and A.I. data center demand. Excellent growth prospects, and seeing value in current share price.