GNRC Drops 10% In A Day, Should You Buy The Stock?

We believe there is a near-equal mix of good and bad in GNRC stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $9.8 Bil in market cap, Generac provides power generation equipment, energy storage systems, engines, batteries, and related components, distributing through residential and industrial dealers.

[1] Valuation Looks Moderate

This table highlights how GNRC is valued vs broader market. For more details see: GNRC Valuation Ratios

[2] Growth Is Moderate

• Generac has seen its top line grow at an average rate of 0.1% over the last 3 years
• Its revenues have grown 9.7% from $4.0 Bil to $4.4 Bil in the last 12 months
• Also, its quarterly revenues grew 6.3% to $1.1 Bil in the most recent quarter from $998 Mil a year ago.

This table highlights how GNRC is growing vs broader market. For more details see: GNRC Revenue Comparison

[3] Profitability Appears Moderate

• GNRC last 12 month operating income was $562 Mil representing operating margin of 12.7%
• With cash flow margin of 15.5%, it generated nearly $682 Mil in operating cash flow over this period
• For the same period, GNRC generated nearly $360 Mil in net income, suggesting net margin of about 8.2%

This table highlights how GNRC profitability vs broader market. For more details see: GNRC Operating Income Comparison

[4] Financial Stability Looks Strong

• GNRC Debt was $1.6 Bil at the end of the most recent quarter, while its current Market Cap is $9.8 Bil. This implies Debt-to-Equity Ratio of 16.3%
• GNRC Cash (including cash equivalents) makes up $224 Mil of $5.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 4.1%

[4] Downturn Resilience Is Weak

GNRC has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• GNRC stock fell 83.7% from a high of $505.80 on 1 November 2021 to $82.20 on 27 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $202.85 on 13 August 2025 , and currently trades at $166.77

 
2020 Covid Pandemic

• GNRC stock fell 33.1% from a high of $118.08 on 4 March 2020 to $79.01 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 May 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read GNRC Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.