Fact based stock research
Generac (NYSE:GNRC)

US3687361044

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Generac stock research in summary

investors.generac.com

ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), Generac (Electr. Components & Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Generac are low in value (priced high) with a consolidated Value Rank of 13 (worse than 87% of alternatives), and are riskily financed (Safety Rank of 19, which means above-average debt burdens) but show above-average growth (Growth Rank of 73). ...read more

RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on Generac's financial characteristics. As the company Generac shows low value with an Obermatt Value Rank of 13 (87% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 73% of comparable companies (Obermatt Growth Rank is 73). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 19 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Generac, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	13
Growth Rank	73
Safety Rank	19
Combined Rank	10

Country	USA
Industry	Electr. Components & Equipment
Index	S&P MIDCAP
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Generac

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	5	17	21	13
GROWTH
GROWTH	98	97	59	73
SAFETY
SAFETY	21	34	40	19
SENTIMENT
SENTIMENT	n/a	21	75	^new
360° VIEW
360° VIEW	n/a	33	56	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Generac is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	5	17	21	13
GROWTH
GROWTH	98	97	59	73
SAFETY
SAFETY	21	34	40	19
COMBINED
COMBINED	28	51	23	10

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Generac the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 13 (worse than 87% compared with alternatives), Generac shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Generac. Price-to-Sales is 33 which means that the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning Generac's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 31, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Generac. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 48 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 13, is a sell recommendation based on Generac's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Generac? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Generac? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Generac may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	12	34	39	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	49	44	44	48
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	19	40	31
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	5	17	21	13

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Generac; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Generac shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Generac. Profit Growth has a rank of 66, which means that currently professionals expect the company to grow its profits more than 66% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 89 (above 89% of alternative investments). But Sales Growth has a below the median rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors, and Capital Growth also has a lower rank of 34. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Generac. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	91	73	57	45
PROFIT GROWTH
PROFIT GROWTH	36	68	27	66
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	62	34
STOCK RETURNS
STOCK RETURNS	94	81	85	89
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	98	97	59	73

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Generac.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company Generac has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Generac is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Generac. Liquidity is at 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 27, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 73% of its competitors. Leverage is also high at a rank of 21, which means that the company has an above-average debt-to-equity ratio. It has more debt than 79% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), Generac has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	45	32	26	21
REFINANCING
REFINANCING	16	15	35	27
LIQUIDITY
LIQUIDITY	60	78	73	61
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	34	40	19

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Generac and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	98	44	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	29	52	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	3	77	^new
MARKET PULSE
MARKET PULSE	n/a	12	70	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	21	75	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Generac.
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