Generac Holdings Inc.
GNRC
$224.94
+0.24%
Generac Holdings Inc. designs and manufactures power generation equipment for residential, commercial, and industrial markets, offering standby and portable generators, lighting, outdoor power equipment, and a suite of clean energy products, with the United States accounting for the majority of sales. The company is the dominant North American player in home standby power and has been repositioning itself as a broader energy-technology platform spanning residential, C&I, and data-center power. The current investor narrative has shifted decisively toward the data-center opportunity: a $2.4 billion initial Amazon generator deal and roughly $700 million in hyperscale wins have validated management's C&I pivot, with C&I revenue growing 29% and analysts debating whether this momentum can become a durable revenue engine. At the same time, margin pressure, execution risk on large contracts, and a premium valuation keep the debate balanced between structural growth story and cyclical residential-recovery play.…
GNRC
Generac Holdings Inc.
$224.94
Related headlines
Investment Opinion: Should I buy GNRC Today?
Rating: Hold, with a constructive bias. The core thesis is that Generac's $2.4 billion Amazon contract and 29% C&I growth have genuinely opened a new data-center revenue engine, but the forward PE of 17.34x already discounts a jump to $18.67 EPS, so the risk/reward is balanced rather than compelling at $224.94. The analyst consensus is buy (mean 1.68) with an average target of $287.78, implying +27.9% upside, but the $215 low target sits below the current price, so the downside is real. Supporting evidence for the constructive stance includes Q2 2026 revenue growth of 10.59% year-over-year, gross margin expansion to 44.47% from 36.29% in Q4 2025, positive TTM free cash flow of $379.2 million, and a PS ratio of 1.90x near the low end of its historical band. However, the trailing PE of 49.95x, EV/EBITDA of 19.31x, and net margin of just 3.79% show profitability is still recovering, and the 3.0% FCF yield is modest for a growth industrial. The biggest risks that could invalidate the thesis are lumpy C&I project timing, a miss against the $18.67 EPS consensus, and residential standby stagnation. This Hold would upgrade to Buy if GNRC demonstrates two consecutive quarters of C&I revenue above $300 million with gross margins holding above 44%, or if the stock pulls back toward $180-$190 where the forward PE would compress below 14x. It would downgrade to Sell if Q3 2026 EPS misses consensus by more than 10% or if C&I growth decelerates below 15%. On valuation, GNRC is fairly valued to slightly undervalued on forward earnings but expensive on trailing and EV/EBITDA metrics, so the stock is best characterized as fairly valued with a data-center option embedded.
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GNRC 12-Month Price Forecast
GNRC presents a genuinely balanced risk/reward at $224.94. The data-center pivot is real and validated by the $2.4 billion Amazon contract, and the margin recovery to 44.47% gross margin in Q2 2026 shows operating leverage is returning. However, the forward PE of 17.34x already prices in a dramatic EPS recovery to $18.67, and the stock's 1.916 beta and -40.78% max drawdown mean any execution stumble could be punished severely. The analyst consensus is constructive at a 1.68 recommendation mean, but the $160 target spread shows the market has not fully bought into the C&I story. I would upgrade to bullish if GNRC delivers two consecutive quarters of C&I revenue above $300 million with gross margins above 44%, and downgrade to bearish if Q3 2026 EPS misses consensus or C&I growth falls below 15%.
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 $287.78 and implied upside of +27.9% versus the current price.
Average Target
$287.78
0 analysts
Implied Upside
+27.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$215 - $375
Analyst target range
Coverage is robust with 18 analysts, and sentiment leans bullish: the consensus recommendation is "buy" with a recommendation mean of 1.68 (where 1.0 is a strong buy), and the average target price of $287.78 implies roughly +27.9% upside from the current $224.94. The distribution skews positive, with recent actions showing JP Morgan maintaining Overweight, Cantor Fitzgerald and Stephens & Co. at Overweight, Canaccord, Needham, and UBS at Buy, and only Barclays (Equal Weight) and Roth Capital (Neutral) on the sidelines — no outright Sell ratings. The consensus is clearly constructive, but the +27.9% implied upside is large enough to suggest the market has not fully bought into the data-center story yet. The target range is wide — $215 low to $375 high — a $160 spread that signals high uncertainty and low conviction on the exact earnings path. The $375 high target implies successful scaling of the Amazon and hyperscale contracts, multiple expansion toward peak-cycle levels, and C&I becoming a durable revenue engine; the $215 low target, barely below the current price, prices in margin compression, lumpy project timing, and residential demand stagnation. The tight clustering of recent ratings around Overweight/Buy with no downgrades, combined with the wide price-target spread, tells you analysts agree on direction but disagree sharply on magnitude — a setup that favors volatility around earnings and contract announcements.
Bulls vs Bears: GNRC Investment Factors
The bull case currently has stronger evidence, anchored by the $2.4 billion Amazon contract, 29% C&I growth, and a sharp margin recovery to 44.47% gross margin in Q2 2026. However, the bear case is not weak: the forward PE of 17.34x versus trailing 49.95x embeds an aggressive earnings recovery to $18.67 EPS, and the stock's 1.916 beta and -40.78% max drawdown show how violently sentiment can reverse. The single most important tension is whether the C&I/data-center revenue is durable and recurring or lumpy project revenue that creates earnings volatility. If C&I proves durable, the multiple can expand toward the $375 high target; if it proves lumpy, the stock likely retests the $175-$180 shelf or even the $134.80 low.
Bullish
- Data-center pivot validated by $2.4B Amazon deal: Generac signed a $2.4 billion initial Amazon generator contract and roughly $700 million in hyperscale wins, directly validating its C&I pivot. C&I revenue is growing 29%, and the Amazon deal alone could add billions in future revenue if deliveries scale as planned.
- Revenue re-accelerating after 2025 trough: Q2 2026 revenue of $1.1735 billion grew 10.59% year-over-year, following Q1 2026's $1.0594 billion and a trough in Q4 2025. The sequential recovery from $942.1 million in Q1 2025 to $1.1735 billion in Q2 2026 shows the business has inflected off its bottom.
- Margins recovering sharply from Q4 2025 loss: Q2 2026 gross margin expanded to 44.47% from 36.29% in Q4 2025, while operating margin rose from 11.07% in Q1 2026 to 17.93% in Q2 2026. Net income swung from a -$24.5 million loss in Q4 2025 to +$143.2 million in Q2 2026.
- Analyst consensus buy with 27.9% upside: 18 analysts rate GNRC a consensus buy (recommendation mean 1.68) with an average target price of $287.78, implying roughly +27.9% upside from the current $224.94. No outright Sell ratings exist, and recent actions from JP Morgan, Cantor Fitzgerald, and UBS remain constructive.
Bearish
- Forward PE embeds a very high earnings bar: The forward PE of 17.34x versus a trailing PE of 49.95x implies the market expects a dramatic earnings recovery to consensus FY EPS of $18.67, versus a depressed trailing EPS of $0.02. This leaves little room for execution missteps, and any shortfall would likely trigger sharp multiple compression.
- C&I revenue may prove lumpy and project-based: The $2.4 billion Amazon deal and $700 million hyperscale wins are large, discrete contracts rather than recurring revenue. If project timing slips or deliveries are back-end loaded, quarterly results could swing violently, as the -40.78% max drawdown already demonstrates.
- Residential standby demand is normalizing: The core residential standby generator business, which drove the 2021-2022 boom, is normalizing, and the extended-warranty segment at $232.9 million remains a small offset. Without residential re-acceleration, the C&I pivot must carry the entire growth narrative.
- Extreme volatility with beta of 1.916: GNRC's beta of 1.916 means it is roughly 92% more volatile than the market, and it has swung more than 20% in a single month, as the September +18% two-day gap showed. The stock sits at $224.94, only about 54% of its 52-week range, having given back a large chunk of peak gains.
GNRC Technical Analysis
GNRC is in a choppy, wide-swinging recovery trend rather than a clean uptrend. The stock is up 30.84% over the past year and 59.42% year-to-date, yet it sits at $224.94, only about 54% of its 52-week range between a low of $134.80 and a high of $296.44, having suffered a max drawdown of -40.78% along the way. That combination of strong annual gains but mid-range positioning tells you this is a volatile, headline-driven name that has given back a large chunk of its peak gains rather than a stock pressing to new highs. Recent momentum is sharply positive: the 1-month change is +20.62% versus the S&P 500's +2.12%, a relative-strength spread of +18.50 percentage points, while the 3-month change is -3.85% and 6-month is +8.65%. That divergence — a strong 1-month surge inside a negative 3-month window — signals a violent mean-reversion bounce off the September lows near $175 rather than a confirmed new leg higher, and the 1-year relative strength of +14.84% versus the 3-month relative strength of -6.98% confirms momentum has decelerated from its spring peak. Key levels are clear: support sits at the 52-week low of $134.80, with a nearer shelf around $175-$180 where the stock bottomed in mid-September, while resistance is the 52-week high of $296.44, with intermediate supply near $280-$295 where the June rally stalled. A breakout above $296 would confirm the data-center re-rating, whereas a breakdown below $175 would reopen the $134.80 low; with a beta of 1.916, GNRC is roughly 92% more volatile than the market, so position sizing must account for swings that can exceed 20% in a single month, as the September +18% two-day gap demonstrated.
Beta
1.92
1.92x market volatility
Max Drawdown
-40.8%
Largest decline past year
52-Week Range
$135-$296
Price range past year
Annual Return
+30.8%
Cumulative gain past year
| Period | GNRC Return | S&P 500 |
|---|---|---|
| 1m | +20.6% | +1.9% |
| 3m | -3.8% | +3.9% |
| 6m | +8.7% | +12.1% |
| 1y | +30.8% | +19.2% |
| ytd | +59.4% | +14.2% |
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GNRC Fundamental Analysis
Revenue is re-accelerating after a soft patch. Q2 2026 revenue was $1.1735 billion, up 10.59% year-over-year, following Q1 2026 revenue of $1.0594 billion and Q4 2025 revenue of $1.0915 billion, which itself was down from $1.2348 billion in Q4 2024. The multi-quarter arc shows a trough in late 2025 followed by sequential recovery — Q1 2026 grew off a weak $942.1 million Q1 2025 base, and Q2 2026's $1.1735 billion exceeded Q2 2025's $1.0612 billion — with the C&I and data-center business (29% growth, $700 million hyperscale deals, $2.4 billion Amazon contract) now the primary growth driver while residential standby demand normalizes. The key question is whether this C&I momentum is durable or lumpy project revenue, since the extended-warranty segment at $232.9 million remains a small, high-margin offset. Profitability is recovering but remains below historical peaks. Q2 2026 net income was $143.2 million with a 12.21% net margin and 44.47% gross margin, a sharp improvement from Q4 2025's net loss of -$24.5 million (-2.24% net margin) and 36.29% gross margin, and ahead of Q2 2025's $74.0 million net income and 39.27% gross margin. Gross margin has expanded from 38.72% in Q1 2026 to 44.47% in Q2 2026, and operating margin rose from 11.07% to 17.93% over the same span, though the TTM figures — 38.29% gross margin and 6.87% operating margin — show how much the Q4 2025 loss and margin volatility drag on trailing profitability. Balance sheet and cash flow are solid but not fortress-like. Debt-to-equity is 0.506 with a current ratio of 2.026, interest coverage of 12.54x in Q2 2026, and TTM free cash flow of $379.2 million against a $12.53 billion market cap, implying an FCF yield of roughly 3.0%. Q2 2026 operating cash flow was $121.2 million with capex of $58.3 million (FCF $62.9 million), and the company spent $89.0 million on acquisitions, while ROE of 6.06% and ROA of 4.72% remain modest versus the 2021-2022 peak levels above 7% ROE, reflecting the earnings trough and heavy working-capital swings.
Quarterly Revenue
$1.2B
2026-06
Revenue YoY Growth
+10.6%
YoY Comparison
Gross Margin
44.5%
Latest Quarter
Free Cash Flow
$379248999.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GNRC Overvalued?
Because GNRC is profitable on a trailing basis (TTM net income positive, EPS of $0.02 on a TTM basis but $2.44 in the latest quarter), the PE ratio is the primary metric, though the trailing PE of 49.95x is distorted by the Q4 2025 loss and is best read alongside the forward PE of 17.34x. The enormous gap between 49.95x trailing and 17.34x forward implies the market expects a dramatic earnings recovery — consensus FY EPS of $18.67 versus the depressed trailing figure — which is a very high bar that leaves little room for execution missteps. On EV/EBITDA of 19.31x and EV/Sales of 3.24x, the stock is priced as a growth industrial rather than a cyclical machinery name. Against the Industrial - Machinery sector, GNRC's forward PE of 17.34x is actually below the market's typical industrial multiple, but its PS of 1.90x and PB of 3.03x sit above where a pure-play generator manufacturer would trade, and its EV/EBITDA of 19.31x is a clear premium to the sector's mid-teens average. The premium is justified only if the data-center/C&I mix shift lifts structural growth and margins; if C&I proves lumpy, the multiple compresses quickly. Historically, GNRC's PE has ranged from roughly 17.8x (Q4 2024) to over 80x in loss quarters, and its PS ratio has ranged from about 5.98x (Q4 2022) to 27.2x (Q3 2021), with the current PS of 1.90x near the low end of its own multi-year band — a striking discount to its 2021-2022 peak. That low PS reflects both the post-2021 de-rating and the earnings recovery already underway, suggesting the market is not pricing in peak-cycle optimism on sales even as the forward PE embeds a strong profit rebound.
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 the gap between trailing and forward profitability. The trailing PE of 49.95x and TTM net margin of just 3.79% reflect the Q4 2025 net loss of -$24.5 million, while the forward PE of 17.34x requires EPS to jump to $18.67 from a trailing $0.02. Debt-to-equity of 0.506 and interest coverage of 12.54x are manageable, but TTM free cash flow of $379.2 million against a $12.53 billion market cap yields only about 3.0%, and Q2 2026 FCF was just $62.9 million after $58.3 million of capex and $89.0 million of acquisitions. ROE of 6.06% and ROA of 4.72% remain well below the 2021-2022 peak above 7% ROE, so the earnings recovery is still unproven. Market and competitive risks are dominated by valuation compression and execution expectations. At EV/EBITDA of 19.31x and EV/Sales of 3.24x, GNRC trades at a clear premium to the industrial machinery sector's mid-teens EBITDA multiple, justified only if the data-center mix shift lifts structural growth and margins. The beta of 1.916 means a broad market selloff would hit GNRC nearly twice as hard, and the 3-month relative strength of -6.98% versus the 1-year +14.84% shows momentum has already decelerated from its spring peak. Competitive threats from alternative off-grid power providers, such as ERock's IPO for AI data-center power, and the risk that hyperscalers insource or dual-source backup generation, could cap the C&I opportunity. The worst-case scenario is a chain in which C&I contract deliveries slip or margins compress, Q3 or Q4 2026 earnings miss the $18.67 consensus, and analysts cut targets toward the $215 low. Combined with residential standby stagnation, this could drive the stock back to its September low near $175, a decline of about -22% from $224.94, and in a severe market-wide de-rating, toward the 52-week low of $134.80, a loss of roughly -40%. The -40.78% max drawdown already experienced shows this magnitude of decline is realistic, not theoretical, and the 1.916 beta amplifies the move if the broader market also weakens.
FAQ
The most severe risk is execution on the data-center pivot: the forward PE of 17.34x requires EPS of $18.67 versus trailing $0.02, so a Q3 2026 miss could trigger sharp multiple compression toward the $215 low target. Second is revenue concentration and lumpiness, since the $2.4 billion Amazon deal and $700 million hyperscale wins are discrete contracts that could slip or be back-end loaded. Third is residential standby stagnation, as the core business is normalizing and the extended-warranty segment at $232.9 million is too small to offset. Fourth is macro and volatility risk, with a beta of 1.916 meaning a market selloff hits GNRC nearly twice as hard, and the stock already sits only 54% of its 52-week range after a -40.78% max drawdown.
The 12-month forecast has three scenarios. The base case (50% probability) targets $260-$300, assuming EPS lands near the $18.67 consensus and C&I growth moderates to 15-20%, aligning with the analyst average target of $287.78. The bull case (30% probability) targets $320-$375, requiring C&I growth above 25%, gross margins above 44%, and multiple expansion toward the analyst high target. The bear case (20% probability) targets $135-$180, driven by a Q3 or Q4 2026 EPS miss, C&I delays, or margin compression, retesting the September low near $175 or the 52-week low of $134.80. The base case is most likely, and its key assumption is that the Amazon and hyperscale contracts convert to revenue on schedule.
GNRC is fairly valued on forward earnings but expensive on trailing and EV/EBITDA metrics. The forward PE of 17.34x is below the typical industrial machinery multiple, but the trailing PE of 49.95x and EV/EBITDA of 19.31x are clear premiums to the sector's mid-teens average. The PS ratio of 1.90x sits near the low end of its historical band of roughly 5.98x to 27.2x, suggesting the market is not pricing peak-cycle sales optimism. The valuation implies the market expects a successful C&I mix shift that lifts structural growth and margins; if that fails, the multiple compresses quickly. On balance, the stock is fairly valued with a data-center option embedded, not a bargain.
GNRC is a reasonable buy for risk-tolerant investors, but not a slam dunk at $224.94. The analyst consensus is buy with an average target of $287.78, implying +27.9% upside, and the $2.4 billion Amazon contract plus 29% C&I growth provide a credible growth catalyst. However, the forward PE of 17.34x versus trailing 49.95x means the market already expects EPS to jump to $18.67, and the $215 low target sits below the current price. With a beta of 1.916 and a -40.78% max drawdown, the downside if C&I proves lumpy is significant. It is a good buy for investors who believe the data-center pivot is durable and can hold through volatility, but a poor entry for those needing near-term certainty.
GNRC is better suited for long-term holding than short-term trading, but only for investors who can tolerate extreme volatility. The beta of 1.916 and the -40.78% max drawdown mean short-term positions face 20%+ monthly swings, as the September +18% two-day gap demonstrated. The dividend yield is negligible at 0.0037%, so there is no income cushion. The growth story, anchored by the $2.4 billion Amazon contract and 29% C&I growth, needs multiple quarters to prove durable, and the forward PE of 17.34x versus trailing 49.95x means earnings visibility is still low. A minimum holding period of 2-3 years is appropriate to allow the C&I pivot to scale and the residential business to stabilize.