Generac Stock To $157?

Generac (GNRC) stock has jumped 29% during the past month, and is currently trading at $225.37. Our multi-factor assessment suggests that it may be time to sell GNRC stock. We have, overall, a pessimistic view of the stock, and a price of $157 may not be out of reach. We believe there are several things to fear in GNRC stock given its overall Weak operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Very Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $13 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 Very High

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

[2] Growth Is Very Weak

• Generac has seen its top line shrink at an average rate of -2.4% over the last 3 years
• Its revenues have fallen -2.0% from $4.3 Bil to $4.2 Bil in the last 12 months
• Also, its quarterly revenues declined -11.6% to $1.1 Bil in the most recent quarter from $1.2 Bil a year ago.

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

[3] Profitability Appears Weak

• GNRC last 12 month operating income was $289 Mil representing operating margin of 6.9%
• With cash flow margin of 10.4%, it generated nearly $438 Mil in operating cash flow over this period
• For the same period, GNRC generated nearly $160 Mil in net income, suggesting net margin of about 3.8%

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 $1.5 Bil at the end of the most recent quarter, while its current Market Cap is $13 Bil. This implies Debt-to-Equity Ratio of 11.4%
• GNRC Cash (including cash equivalents) makes up $341 Mil of $5.6 Bil in total Assets. This yields a Cash-to-Assets Ratio of 6.1%

[5] 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 $236.58 on 25 February 2026 , and currently trades at $225.37

 
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.

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