Generac Holdings Inc. Soars Amid Growing Demand for Backup Power Solutions
Wisconsin’s own Generac Holdings Inc. (GNRC) is making waves in the energy technology sector. With a market capitalization of $10.7 billion, the company provides a range of products, including engines, alternators, mobile heaters, water pumps, and energy monitoring devices designed for both residential and commercial applications.
Over the past 52 weeks, Generac’s stock has dramatically surpassed the broader market. GNRC shares have surged by 62.9%, while the S&P 500 Index ($SPX) has shown a respectable gain of 31.1%. Year to date (YTD), GNRC’s stock is up 42%, compared to the SPX’s 24.7% increase.
When compared with the Industrial Select Sector SPDR Fund’s (XLI) 32.9% gain over the past year and its 23.4% YTD return, Generac’s performance appears even stronger.
Generac’s impressive performance derives largely from a growing demand for backup power products. Increased power outages and supply-demand issues in the grid have spurred interest in their offerings. Following a strong Q3 earnings report on October 31, GNRC shares experienced a noteworthy rise as well. The company reported adjusted earnings of $2.25 per share, surpassing Wall Street’s expectations of $1.98 and marking a 37.2% increase from the previous year.
The company’s revenue also saw a 9.3% year-over-year growth, reaching $1.17 billion and exceeding predictions of $1.16 billion. Contributing factors for this robust performance were strong sales of home standby and portable generators, an uptick in power outages, and improved production efficiencies. Additionally, Generac raised its revenue and net margin guidance for 2024, which likely boosted investor confidence.
Analysts project GNRC’s earnings per share (EPS) to grow by 25.9% year-over-year to $6.80 for the current fiscal year ending in December. The company’s history of earnings surprises has been mixed; it has beaten estimates three out of the last four quarters, missing on one occasion.
Among the 25 analysts covering Generac, the overall consensus rating is a “Moderate Buy.” This includes 12 “Strong Buy,” one “Moderate Buy,” nine “Hold,” one “Moderate Sell,” and two “Strong Sell” ratings.
This outlook is slightly less optimistic than it was three months ago when analysts were more bullish with 13 recommending a “Strong Buy.”
On November 19, Stifel maintained its “Buy” rating on Generac and raised its price target to $210, which is the highest on the street, suggesting a potential upside of 14.4% from current levels.
Currently, the company is trading above its average price target of $177.50.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please see the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
