Generac Holdings Inc.
GNRC
$175.11
+0.05%
Generac Holdings Inc. designs and manufactures power generation equipment — standby and portable generators, lighting, outdoor power equipment, and a growing suite of clean energy and energy-technology products — serving residential, commercial, and industrial customers, with the United States accounting for the majority of sales. The company is the dominant North American player in home standby power, a category it largely created and still leads, and it is increasingly positioning itself as an energy-technology platform rather than a pure-play generator manufacturer. The current investor narrative centers on Generac's strategic pivot to supply backup and prime power for AI data centers, a pivot that has driven explosive backlog commentary and a sharp re-rating in the stock during 2026, even as the core residential business remains tied to outage activity and discretionary consumer spending. That enthusiasm has been tempered recently by a sharp multi-month drawdown, with the stock down roughly 29% over three months and 16% over the past month as investors debate whether the data-center opportunity justifies the premium valuation and whether execution risk, competition from dedicated power providers, and a soft residential backdrop could derail the story.…
GNRC
Generac Holdings Inc.
$175.11
Related headlines
Investment Opinion: Should I buy GNRC Today?
Rating: Hold with a speculative-buy bias for risk-tolerant investors. The core thesis is that GNRC's forward valuation (15.82x forward PE on $17.13 EPS) is undemanding and the analyst consensus target of $283.88 implies +51.8% upside, but the stock is in a severe downtrend (-28.73% over three months) with thin trailing profitability (3.79% net margin) and elevated cash-flow multiples (EV/EBITDA 19.31x), so the risk/reward is balanced rather than compelling. The consensus 'buy' rating (mean 1.76 from 16 analysts) and the fact that even the lowest target ($214) sits above the current price anchor the constructive view.
Supporting evidence: revenue re-accelerated 12.44% YoY in Q1 2026 to $1.059 billion; Q1 2026 operating margin improved to 11.07% from 8.88% a year earlier; TTM free cash flow is $330.8 million with debt-to-equity of only 0.51 and interest coverage of 7.63x; and the PS ratio of 1.90x and PB of 3.03x are near multi-year lows versus the 2021 peak PS of 20.77x. The forward PE of 15.82x is below the typical mid-to-high-teens to low-20s range for quality industrial machinery names, suggesting the market is not paying a growth premium on forward earnings.
Biggest risks that could invalidate the thesis: (1) data-center backlog fails to convert to high-margin revenue, leaving EV/EBITDA of 19.31x unjustified; (2) gross margin continues to compress below 38.72%, pressuring the forward EPS estimate of $17.13; and (3) the high beta of 1.913 amplifies any macro-driven selloff. The rating would upgrade to Buy if the stock holds above $220 (the August consolidation zone) and data-center revenue is disclosed separately with healthy margins, or downgrade to Sell if it breaks below $180.76 and revenue growth decelerates below 10%. Valuation verdict: fairly valued to modestly undervalued on forward earnings, but expensive on current cash-flow metrics — the stock is a show-me story.
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GNRC 12-Month Price Forecast
GNRC presents a classic show-me setup: the forward valuation (15.82x PE) is undemanding and the analyst consensus is strikingly bullish with a $283.88 average target, but the stock is in a severe downtrend and trailing profitability is thin (3.79% net margin, $0.02 TTM EPS). The bull case hinges on data-center backlog conversion to high-margin revenue, which would justify the EV/EBITDA of 19.31x and drive the stock toward the $296-$340 range; the bear case is a delayed conversion or renewed quarterly losses that push the stock toward the $134.80 52-week low. With a 50% base-case probability and a 30/20 bull/bear split, the risk/reward is balanced but skewed by the high beta of 1.913. I would upgrade to bullish if the stock reclaims $220 and data-center revenue is disclosed with healthy margins, and downgrade to bearish if it breaks below $180.76 or gross margin falls below 38%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Generac Holdings Inc.'s 12-month outlook, with a consensus price target around $283.88 and implied upside of +62.1% versus the current price.
Average Target
$283.88
0 analysts
Implied Upside
+62.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$214 - $340
Analyst target range
Coverage is solid, with 16 analysts and a consensus recommendation of "buy" (recommendation mean of 1.76 on a scale where 1 is Strong Buy and 5 is Strong Sell). The average target price is $283.88, which implies roughly +51.8% upside from the current price of $186.99 — a strikingly bullish consensus relative to the stock's recent price action. The consensus revenue estimate of $7.48 billion and EPS estimate of $17.13 for the forward period underpin that target, and the buy-leaning distribution (with recent actions including Jefferies upgrading to Buy from Hold on May 22, 2026, and UBS, Wells Fargo, TD Cowen, and JP Morgan all maintaining Buy/Overweight ratings) indicates analysts remain constructive despite the drawdown. The consensus clearly leans bullish, and the gap between the average target and the current price suggests the market has overshot to the downside relative to analyst expectations.
The target range is wide, from a low of $214.00 to a high of $340.00 — a spread of $126, or roughly 59% of the low target — which signals meaningful disagreement about the company's trajectory. The high target of $340 implies multiple expansion and successful, accelerating data-center revenue conversion, while the low target of $214 still implies +14.4% upside from the current price, meaning even the most cautious analyst sees the stock as undervalued. Notably, the lowest target ($214) is above the current price, a rare configuration that suggests the recent selloff has pushed the stock below even the bear case. The institutional ratings pattern shows mostly reiterations rather than fresh downgrades, with the notable upgrade from Jefferies in May; the absence of recent downgrades despite the 29% three-month decline suggests analysts view the weakness as sentiment-driven rather than fundamental. The wide spread, combined with the high beta of 1.913 and the stock's 38.84% maximum drawdown, means investors should expect continued volatility and treat the consensus target as a directional signal rather than a precise price objective.
Bulls vs Bears: GNRC Investment Factors
The bear case currently has stronger near-term evidence: the stock is in a clear intermediate downtrend, down 28.73% over three months and underperforming SPY by 31.77 points, with thin trailing profitability (3.79% net margin, $0.02 TTM EPS) and elevated EV/EBITDA of 19.31x. The bull case rests on a forward-looking earnings recovery (forward PE of 15.82x on $17.13 EPS) and an analyst consensus that is strikingly bullish, with an average target of $283.88 implying +51.8% upside and even the lowest target ($214) above the current price. The single most important tension is whether the AI data-center backlog converts to high-margin revenue on schedule — if it does, the forward multiple is cheap and the selloff is an opportunity; if it slips, the stock is expensive on cash-flow metrics and the downtrend likely extends toward the 52-week low of $134.80. Until there is concrete evidence of data-center revenue conversion, the risk/reward is balanced but the momentum and profitability data favor caution.
Bullish
- Analyst targets imply 51.8% upside: The 16-analyst consensus average target is $283.88 versus the current $186.99, implying +51.8% upside, and the consensus recommendation is 'buy' with a mean of 1.76. Even the lowest target of $214 sits 14.4% above the current price, a rare configuration suggesting the selloff has pushed the stock below even the most cautious analyst's fair value.
- Forward PE of 15.82x is undemanding: Based on consensus forward EPS of $17.13, GNRC trades at just 15.82x forward earnings, below the typical mid-to-high-teens to low-20s range for quality industrial machinery names. The PS ratio of 1.90x and PB of 3.03x are near multi-year lows versus the 2021 peak PS of 20.77x and PB of 10.01x.
- Revenue re-accelerating at 12.44% YoY: Q1 2026 revenue of $1.059 billion rose 12.44% year-over-year versus $942.1 million in Q1 2025, with the sequential trend holding above $1.05 billion for four straight quarters. The data-center power pivot is adding a new demand vector on top of the core residential standby business.
- Profitability recovery is sharp: Q1 2026 EBITDA of $168.1 million (15.87% margin) versus Q4 2025's $40.4 million (3.70% margin) shows how quickly results can swing, and Q1 2026 operating margin of 11.07% improved from 8.88% in Q1 2025. Forward EPS of $17.13 implies a dramatic recovery from the depressed trailing EPS of $0.02.
Bearish
- Severe downtrend and relative weakness: GNRC is down 28.73% over three months and 15.73% over one month, underperforming SPY by 31.77 and 14.67 percentage points respectively over those periods. At $186.99 the stock sits at just 32.6% of its 52-week range of $134.80 to $296.44, closer to the low than the high.
- Thin and volatile profitability: TTM net margin is only 3.79% and trailing EPS is $0.02, while Q4 2025 posted a net loss of $24.46 million (EPS -$0.42) on a negative 0.85% operating margin. Gross margin has compressed from 40.61% in Q4 2024 to 38.72% in Q1 2026, and ROE of 6.06% and ROA of 4.72% are modest for an industrial.
- Valuation rich on cash-flow metrics: EV/EBITDA of 19.31x and price-to-free-cash-flow of 18.22x are elevated for a company with a 6.87% operating margin and 3.79% net margin. The premium is justified only if the data-center backlog converts to high-margin revenue; otherwise the stock is expensive relative to current profitability.
- High beta amplifies downside: Beta of 1.913 means GNRC is roughly 91% more volatile than the market, and the maximum drawdown of -38.84% underscores the severity of downside moves. Position sizing must reflect that this name can move nearly twice as much as SPY in either direction.
GNRC Technical Analysis
Generac is in a clear intermediate downtrend within a longer-term recovery that has stalled. The stock is down 0.46% over the past year and down 28.73% over three months, but remains up 32.52% year-to-date, meaning the YTD gain is a fading remnant of a powerful first-half rally rather than current momentum. At $186.99, the shares sit at roughly 32.6% of the 52-week range of $134.80 to $296.44 — closer to the low end than the high — which signals that the market has aggressively repriced the stock lower from its June peak near $295 and that buyers have so far failed to defend the mid-range. The 52-week high of $296.44 was set in late June, and the failure to hold above $280 has left a large overhead supply zone.
Short-term momentum is decisively negative and diverging bearishly from the YTD trend. The 1-month change of -15.73% and 3-month change of -28.73% both contrast sharply with the +32.52% YTD gain, a classic deceleration pattern in which the trailing trend is being unwound by fresh selling. Relative strength confirms the weakness: GNRC has underperformed SPY by 14.67 percentage points over one month, 31.77 points over three months, and 16.68 points over one year, even though it still leads SPY by 20.44 points YTD. The most recent session did show a bounce, with the stock up 2.93% to $186.99 on volume of 568,631 shares, but that single-day rebound follows a slide to $180.76 on September 2 and does not yet reverse the lower-highs structure.
Key technical levels are well defined. Support sits at the 52-week low of $134.80, with the recent September low of $180.76 acting as the first line of defense; a breakdown below $180 would open the door to a retest of the $160s and potentially the 52-week low. Resistance is layered at the $215–$220 area (the August consolidation zone) and then the 52-week high of $296.44; a decisive breakout above $220 would be the first evidence of a trend reversal, while a move through $296 would confirm a new leg higher. Volatility is a critical consideration: the beta of 1.913 means GNRC is roughly 91% more volatile than the market, and the maximum drawdown of -38.84% over the period underscores the severity of downside moves — position sizing should reflect that this name can move nearly twice as much as SPY in either direction.
Beta
1.91
1.91x market volatility
Max Drawdown
-40.8%
Largest decline past year
52-Week Range
$135-$296
Price range past year
Annual Return
-4.6%
Cumulative gain past year
| Period | GNRC Return | S&P 500 |
|---|---|---|
| 1m | -20.9% | -2.4% |
| 3m | -37.3% | +1.0% |
| 6m | -12.1% | +16.3% |
| 1y | -4.6% | +14.3% |
| ytd | +24.1% | +10.6% |
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GNRC Fundamental Analysis
Generac's revenue trajectory has re-accelerated after a soft patch. The most recent quarter (Q1 2026, ended March 31, 2026) delivered revenue of $1.059 billion, up 12.44% year-over-year versus $942.1 million in Q1 2025, and the sequential trend is constructive: revenue rose from $1.061 billion in Q2 2025 to $1.114 billion in Q3 2025, dipped to $1.092 billion in Q4 2025, then held at $1.059 billion in Q1 2026. The YoY growth of 12.44% compares favorably to the prior-year Q1 comparison and reflects the early contribution of data-center-related demand alongside the core residential business. The single disclosed segment, Extended Warranties, contributed $226.6 million, a meaningful recurring-revenue stream that supports the growth narrative, though the company does not break out data-center revenue separately, which limits visibility into the durability of the AI-driven acceleration.
Profitability is positive but thin and volatile. Q1 2026 net income was $73.25 million on revenue of $1.059 billion, a net margin of 6.91%, with gross profit of $410.2 million and a gross margin of 38.72%. That gross margin is down from 39.48% in Q1 2025 and 40.61% in Q4 2024, indicating modest compression, while the operating margin of 11.07% in Q1 2026 improved from 8.88% in Q1 2025. The volatility is stark: Q4 2025 posted a net loss of $24.46 million (EPS of -$0.42) on a negative 0.85% operating margin, driven by a gross margin decline to 36.29% and elevated SG&A of $319.0 million. The TTM picture is weak — trailing EPS of $0.02 and a net margin of 3.79% — but the forward EPS estimate of $17.13 implies a dramatic profitability recovery, and the Q1 2026 EBITDA of $168.1 million (15.87% EBITDA margin) versus Q4 2025's $40.4 million (3.70%) shows how quickly results can swing.
Balance sheet and cash flow metrics are adequate but not fortress-like. Debt-to-equity is 0.51, the current ratio is 2.03, and interest coverage in Q1 2026 was a healthy 7.63x, while ROE is only 6.06% and ROA 4.72% — modest returns for an industrial. Free cash flow on a TTM basis is $330.8 million, and Q1 2026 free cash flow was $89.9 million on operating cash flow of $119.3 million against capital expenditure of $29.4 million; however, the company spent $122.8 million on acquisitions in the quarter, contributing to a net cash decrease of $75.9 million and leaving cash at $265.5 million. The cash conversion cycle is long at 162.6 days (inventory days of 173.6 and receivables days of 53.2), which ties up working capital, and the cash-flow-to-debt ratio of 0.09 is low — the company generates cash but relies on its balance sheet and modest leverage to fund both buybacks and the data-center growth investments.
Quarterly Revenue
$1.1B
2026-03
Revenue YoY Growth
+12.4%
YoY Comparison
Gross Margin
38.7%
Latest Quarter
Free Cash Flow
$330800999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GNRC Overvalued?
Because Generac is profitable on a trailing basis (net income positive, though barely — trailing EPS of $0.02), the PE ratio is the primary metric, but it is distorted by the near-zero trailing earnings. The trailing PE of 49.95x is essentially meaningless given the depressed TTM earnings base, while the forward PE of 15.82x — based on the consensus forward EPS estimate of $17.13 — is the far more informative figure. The enormous gap between the 49.95x trailing and 15.82x forward multiple implies the market is pricing in a very sharp earnings recovery, consistent with the data-center-driven growth narrative; if that recovery fails to materialize, the stock is far more expensive than the forward multiple suggests. The PS ratio of 1.90x and EV/Sales of 2.67x provide a cleaner cross-check on the revenue-based valuation.
Relative to the broader industrial machinery sector, Generac screens as a premium asset on earnings-based measures but not egregiously so on sales. The forward PE of 15.82x is actually below the typical mid-to-high-teens to low-20s range for quality industrial machinery names, suggesting the market is not paying a growth premium on forward earnings — a notable disconnect given the AI data-center narrative. However, the EV/EBITDA of 19.31x and price-to-free-cash-flow of 18.22x are elevated for a company with a 6.87% operating margin and 3.79% net margin, and the PEG ratio of -1.00 is negative and therefore not meaningful given the depressed trailing earnings base. The premium on cash-flow and EBITDA multiples appears justified only if the data-center backlog converts to high-margin revenue; otherwise, the stock is expensive relative to its current profitability.
Historically, Generac's valuation has compressed dramatically from its 2021 peak, when the PS ratio reached 20.77x and the PB ratio 10.01x. Today's PS of 1.90x and PB of 3.03x are near multi-year lows — the PB ratio has ranged from roughly 2.78x (Q4 2022) to 10.01x (Q4 2021), and the current 3.03x sits in the lower quartile of that band. The trailing PE history is noisy (ranging from 17.78x in Q4 2024 to 135.01x in Q1 2023), but the forward PE of 15.82x is at the low end of the stock's historical earnings multiple range, implying the market is pricing in either skepticism about the recovery or a structurally lower growth outlook. The combination of low PS/PB and low forward PE suggests the stock is not priced for perfection on a normalized basis — but the negative PEG and thin current margins mean the valuation is highly sensitive to execution on the data-center pivot.
PE
50.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 18x~82x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on thin, volatile profitability and a working-capital-heavy balance sheet. TTM net margin is just 3.79% with trailing EPS of $0.02, and Q4 2025 swung to a net loss of $24.46 million (EPS -$0.42) on a negative 0.85% operating margin, demonstrating extreme earnings volatility. Gross margin has compressed from 40.61% in Q4 2024 to 38.72% in Q1 2026, and the cash conversion cycle is long at 162.6 days (inventory days of 173.6), tying up working capital. The cash-flow-to-debt ratio of 0.09 is low, and the company spent $122.8 million on acquisitions in Q1 2026, contributing to a net cash decrease of $75.9 million and leaving cash at $265.5 million — adequate but not fortress-like.
Market and competitive risks are amplified by the stock's high beta of 1.913 and its premium on cash-flow metrics. EV/EBITDA of 19.31x and price-to-free-cash-flow of 18.22x are elevated for a company with a 6.87% operating margin, leaving the stock vulnerable to multiple compression if the data-center narrative cools. Competition is intensifying: ERock's IPO provides off-grid power for AI data centers backed by explosive backlog growth, and dedicated power providers could erode Generac's pricing power. The stock has underperformed SPY by 31.77 percentage points over three months, and with the 52-week high of $296.44 set in late June, a large overhead supply zone between $215 and $296 caps rallies. Regulatory and macro sensitivity — including interest-rate-driven valuation compression for high-beta industrials — adds further risk.
In a worst-case scenario, data-center orders slip or convert at lower-than-expected margins, the residential business stays soft on mild outage activity and discretionary spending pressure, and Q4-style losses recur, forcing analysts to cut targets. The stock would likely retest the September low of $180.76, then the $160s, and potentially the 52-week low of $134.80 — a decline of roughly 28% from the current $186.99. If the analyst low target of $214 were abandoned and the stock traded to its 52-week low, investors could lose about 28% from current levels, and a repeat of the -38.84% maximum drawdown would imply a price near $114. The high beta of 1.913 means such a move could happen quickly in a broad market selloff.
FAQ
The most severe risk is earnings volatility and thin profitability: TTM net margin is 3.79% with EPS of $0.02, and Q4 2025 posted a net loss of $24.46 million (EPS -$0.42) on a negative 0.85% operating margin. Second is valuation compression risk: EV/EBITDA of 19.31x and price-to-FCF of 18.22x are elevated for a 6.87% operating margin, leaving the stock vulnerable if the data-center narrative cools. Third is competitive disruption from dedicated power providers such as ERock, whose IPO-backed backlog growth could erode Generac's data-center pricing power. Fourth is macro and volatility risk: beta of 1.913 means GNRC moves nearly twice as much as the market, and the maximum drawdown of -38.84% shows how severe the downside can be in a broad selloff.
The 12-month forecast is split across three scenarios: a 50% probability base case targeting $214-$284 (aligned with the analyst average of $283.88), a 30% probability bull case targeting $296-$340 (aligned with the analyst high and the 52-week high of $296.44), and a 20% probability bear case targeting $134.80-$214 (aligned with the 52-week low and analyst low). The base case assumes forward EPS of $17.13 is broadly achieved with roughly 12% revenue growth and gross margin stabilizing near 38-39%. The most likely outcome is the base case, where the stock grinds higher but remains volatile; the key assumption is that data-center backlog converts to revenue without major margin disappointment.
GNRC looks fairly valued to modestly undervalued on forward earnings but expensive on current cash-flow metrics. The forward PE of 15.82x (on $17.13 EPS) is below the typical mid-to-high-teens to low-20s range for quality industrial machinery names, and the PS of 1.90x and PB of 3.03x are near multi-year lows versus the 2021 peak PS of 20.77x and PB of 10.01x. However, EV/EBITDA of 19.31x and price-to-free-cash-flow of 18.22x are elevated for a company with a 6.87% operating margin and 3.79% net margin. The market is pricing in a sharp earnings recovery — the gap between the 49.95x trailing PE and 15.82x forward PE is enormous — so if the recovery fails, the stock is far more expensive than the forward multiple suggests.
From a risk/reward perspective, GNRC is a reasonable speculative buy for risk-tolerant investors but not a compelling one for conservative portfolios. The analyst consensus target of $283.88 implies +51.8% upside from $186.99, and even the lowest target of $214 is 14.4% above the current price, while the forward PE of 15.82x is undemanding. However, the stock is down 28.73% over three months, trailing EPS is just $0.02, and the net margin is 3.79%, so the downside risk is real — a retest of the 52-week low of $134.80 would mean a 28% loss. It is a good buy for investors who believe the AI data-center backlog will convert to high-margin revenue and who can stomach the 1.913 beta; for others, waiting for evidence of margin stabilization above 38% and a reclaim of $220 is prudent.
GNRC is better suited for medium-to-long-term holding (minimum 12-18 months) than short-term trading, given its high beta of 1.913 and 38.84% maximum drawdown, which make short-term price action unpredictable. The company pays a negligible dividend (yield of 0.0037%), so returns depend entirely on capital appreciation, and earnings visibility is limited because data-center revenue is not disclosed separately. The growth stage is transitional — pivoting from cyclical residential generator maker to energy-technology platform — which means the investment thesis needs time to play out. A concrete minimum holding period of 12-18 months allows for two to three earnings cycles to validate whether the forward EPS of $17.13 and the data-center backlog are achievable.