Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Thursday, KeyBanc Capital Markets maintained a "Sector Weight" rating on Generac Holdings Inc. (NYSE:GNRC), indicating a neutral stance on the stock. The research firm’s analyst, Jeffrey Hammond, provided insights into the company’s prospects, with the company’s Q1 2025 earnings report due on April 30. According to InvestingPro data, Generac’s stock has shown significant volatility, declining nearly 30% year-to-date, though current analysis suggests the stock may be undervalued.
In his analysis, Hammond noted that Generac’s first-quarter performance might turn out to be more positive than initially anticipated, despite the long-term challenges the company faces. The company maintains strong fundamentals with an InvestingPro Financial Health Score rated as "GOOD" and a current ratio of 1.97, indicating solid liquidity. Hammond pointed out that the stock’s valuation has dipped below the lower end of its historical range, with the current EV/EBITDA ratio at 10.83x.
The analyst acknowledged the need for caution regarding the Home Standby Business (HSB) due to the discretionary nature of backup power purchases. However, he also mentioned that current sentiment towards Generac is highly negative, which could suggest that market expectations have already accounted for potential downsides.
Hammond expressed a desire to better understand the potential impact of tariff uncertainty on demand, as well as to gain clarity on the company’s long-term strategic plans for its Energy Technology segment. He highlighted that this segment has been a drag on Generac’s earnings and cash flow.
Generac Holdings Inc. is a manufacturer of power generation equipment and other engine-powered products, providing solutions for residential, light commercial, and industrial markets. The company’s stock performance and market sentiment are closely watched by investors, particularly in the context of economic factors that may affect consumer and business spending on such equipment.
In other recent news, Generac Holdings Inc. reported its fourth-quarter earnings for 2024, exceeding analysts’ expectations with an earnings per share (EPS) of $2.80, compared to the forecast of $2.52. The company’s net sales rose by 16% year-over-year to $1.23 billion, although this was slightly below revenue forecasts. Generac’s gross margins reached 38.8%, the highest since 2010, driven by strategic innovations and expansions in the home standby generator market and the data center backup power market. Meanwhile, BofA Securities reinstated coverage of Generac with a Buy rating and a price target of $182, citing the company’s strong market position in backup power and opportunities in underpenetrated markets like Texas, Florida, and California.
Additionally, Piper Sandler adjusted its price target for Generac to $155 from $175, maintaining an Overweight rating despite concerns over tariffs and their potential impact on first-quarter earnings. The analysts noted Generac’s exposure to China and the potential need for the company to shift its import strategy. Barclays (LON:BARC) also made a slight adjustment to Generac’s stock price target, reducing it to $188, while maintaining an Equalweight rating, highlighting uncertainties in the global trade environment. These recent developments reflect the complex factors Generac must navigate, including trade policies, supply chain challenges, and evolving market demands.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.