Generac stock holds as Oppenheimer maintains Perform rating

On Wednesday, Oppenheimer analyst Christopher Glynn maintained a Perform rating for Generac Holdings (NYSE:GNRC) following the company’s fourth-quarter earnings report. According to InvestingPro data, Generac is currently trading below its Fair Value, with the stock showing a beta of 1.42 and maintaining strong liquidity with a current ratio of 2.03. Generac’s adjusted earnings per share (EPS) for the quarter came in at $2.80, which represented a 36% increase and aligned with Oppenheimer’s estimate of $2.53. The company’s sales reached $1.235 billion, marking a 16.1% rise and closely matching the firm’s estimate of a 16.0% increase.

Generac’s adjusted EBITDA margin for the quarter exceeded expectations at 21.5%, which was 150 basis points higher than Oppenheimer’s projection of a 20.5% margin. The company demonstrates solid financial health with a strong Piotroski score of 8 and operates with a moderate debt-to-equity ratio of 0.66, as reported by InvestingPro. Residential sales for the quarter were reported at $743 million, a 28% increase, although slightly below Oppenheimer’s estimate of $765 million. Commercial & Industrial (C&I) sales were flat at $363 million, surpassing the firm’s estimate of a 4% decline to $349 million. Additionally, the Other sales category, which includes components and grid services, achieved $128 million, up 6% and exceeding the estimate of $120 million.

Looking ahead, Generac has set its 2025 revenue growth target between 3-7%, with adjusted EBITDA margins forecasted at 18-19% and net income margins expected to be between 8-9%. The guidance anticipates Residential sales growth in the mid-single to high-single digits and approximately flat C&I sales. Free cash flow to adjusted net income (FCF/ANI) is projected to be within the 80-90% range. Oppenheimer estimates that these guidance metrics could translate to an adjusted EPS of approximately $7.40-8.40 for 2025, compared to their own estimate of $7.65 and the Street’s $8.10.

The detailed guidance metrics are anticipated to be further clarified during Generac’s earnings call. As of now, Oppenheimer’s stance on Generac stock remains unchanged post-earnings, with the Perform rating reflecting the firm’s outlook on the stock’s potential performance. InvestingPro subscribers have access to 7 additional key insights about Generac, including detailed analysis of its growth prospects and comprehensive Pro Research Reports that transform complex Wall Street data into actionable intelligence.

In other recent news, Generac Holdings has been the subject of numerous analyst ratings. Jefferies reiterated its underperform rating and a target price of $140, following Generac’s recent earnings report, which surpassed consensus estimates due to robust growth in residential products. For 2025, Generac anticipates sales growth of 3-7%, translating to approximately $4.5 billion, slightly below the consensus estimate of $4.6 billion. The company expects an EBITDA of approximately $835 million, less than the consensus projection of $877 million.

Stifel analysts reaffirmed their buy rating with a steady price target of $210. Despite the decline in Generac’s stock price due to various factors, Stifel maintains confidence in the company’s ability to navigate through the headwinds. Meanwhile, KeyBanc analyst Jeffrey Hammond maintained a sector weight rating, suggesting a conservative outlook for 2025 due to limited visibility in home standby and inconsistent commercial and industrial trends.

Furthermore, Barclays (LON:BARC) initiated coverage on Generac with an equal weight rating and a price target of $189, reflecting the company’s current market position and growth prospects. These recent developments provide investors with an overview of the varying perspectives on Generac’s performance and future prospects.

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