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With a market cap of $8 billion, Waukesha, Wisconsin-based Generac Holdings Inc. (GNRC) is a manufacturer of power generation equipment, energy storage systems, and other power products, including portable, residential, commercial, and industrial generators.
Companies worth $2 billion to $10 billion are typically referred to as "mid-cap stocks." GNRC fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the industrial space, offering a worldwide distribution of its energy technology products and solutions.
GNRC currently trades 28.9% below its two-year high of $195.94 recorded on Nov. 11, 2024. GNRC's stock has gained 2.4% over the past three months, underperforming the Nasdaq Composite’s ($NASX) 9.3% uptick during the same time frame.
In the long term, GNRC stock has declined 10.1% on a YTD basis, underperforming the Nasdaq’s 3.4% increase. Moreover, shares of GNRC grew 2.4% over the past 52 weeks, notably underperforming Nasdaq’s 12.7% returns over the same period.
GNRC stock has been trading below its 200-day moving average since late January, but climbed above its 50-day moving average in mid-May.
Generac Holdings’ stock prices gained more than 1% after the release of its impressive Q1 results on Apr. 30. The increased number of power outages continued to drive growth for the company’s home standby generator, leading to robust growth in residential product sales. This led to Generac’s net sales growing 5.9% year-over-year to $942.1 million, surpassing the Street’s expectations by 2.5%. Furthermore, Generac has also experienced notable margin expansion, leading to its adjusted net income soaring 42.3% year-over-year to $75.4 million. Moreover, its adjusted EPS of $1.26 surpassed the consensus estimates by a staggering 27.3%.
Despite the solid Q1 performance, Generac has turned more uncertain about the company’s full-year performance due to the potential impact of tariffs and volatile government policies and macro environment. The company revised its net sales growth guidance from the previous range of 3% - 7% to 0% - 7% and its adjusted EBITDA margin from the prior range of 18% - 19% to 17% - 19%.
Its peer, A. O. Smith Corporation (AOS), has declined 21.6% over the past year, underperforming the GNRC stock.
Among the 22 analysts covering the GNRC stock, the consensus rating is a “Moderate Buy.” Its mean price target of $148.78 suggests a 6.7% upside potential from current price levels.
