Company Overview
Generac Holdings Inc. operates as a global provider of energy technology products and solutions, specifically designing, manufacturing, and distributing items such as residential automatic standby generators, automatic transfer switches, and both air-cooled and liquid-cooled engine generators. The company is categorized within the Industrials sector under the Specialty Industrial Machinery industry, positioning it as a key player in the infrastructure and equipment supply chain for energy reliability. This industrial entity maintains a substantial scale with a market capitalization of $11.79B and an annual revenue base of $4.21B, supported by a workforce of 9,400 employees. These valuation and revenue figures indicate that the company holds a significant market position, reflecting a large operational footprint and a substantial asset base that commands considerable investor attention within the machinery sector.
Financial Health
The company reported a trailing twelve-month revenue of $4.21B and generated $159.55M in net income, while reporting an EBITDA of $484.03M. The gap between the $4.21B revenue and the $159.55M net income reveals a cost structure where operating expenses, including cost of goods sold and overhead, consume approximately 96.2% of total revenue before reaching the bottom line. Free cash flow for the period was $91.86M, which provides the company with financial flexibility to manage capital expenditures, service its debt obligations, or pursue strategic acquisitions without relying solely on external financing. The gross margin stands at 38.3%, indicating the portion of revenue remaining after direct production costs, while the operating margin is -0.9%, suggesting that operating expenses currently exceed gross profit. The profit margin is 3.8%, showing the final profitability after all expenses, taxes, and interest have been accounted for. On the balance sheet, the company holds $341.41M in cash against $1.38B in debt, resulting in a debt-to-equity ratio of 52.48, which characterizes a leveraged balance sheet rather than a conservative one. The current ratio is 2.03, indicating that the company holds more than twice the value of current assets relative to current liabilities, which points to strong short-term liquidity and the ability to meet upcoming obligations. Return on equity is 6.3% and return on assets is 3.4%, metrics that reveal the efficiency with which management utilizes shareholder equity and total assets to generate net income.
Valuation Assessment
Generac Holdings Inc. trades with a trailing P/E ratio of 74.67 and a forward P/E of 19.47, a significant disparity that implies the market expects a dramatic improvement in earnings trajectory to align future valuation multiples with current historical averages. The price-to-book ratio is 4.48, which indicates that the market is pricing the company at a substantial premium over its book value, reflecting investor confidence in intangible assets or future growth potential beyond tangible assets. Alternative valuation metrics such as the price-to-sales ratio of 2.80 and an EV/EBITDA of 26.52 suggest that the company is valued highly relative to its revenue generation and earnings power before interest, taxes, depreciation, and amortization. The stock has a 52-week high of $241.09 and a 52-week low of $99.50, meaning the current price sits at a level that requires calculation relative to this wide range to determine its position within the trading band. The beta value is 1.77, which signifies that the stock price is expected to be 77% more volatile than the broader market, exposing investors to higher fluctuations in price during periods of market stress or rally.
Growth & Income
Revenue growth year-over-year is -11.6%, while earnings growth year-over-year is N/A, indicating that the company is currently experiencing a contraction in top-line sales where earnings data does not provide a comparable growth metric due to lack of prior period data or reporting standards. The absence of a dividend yield, which is listed as N/A, and a payout ratio of 0.0% confirms that the company is not a dividend payer and instead retains earnings for reinvestment into growth initiatives, research, or debt reduction. This strategy of zero dividends means the company prioritizes capital allocation toward operational expansion and maintaining its technological edge rather than distributing cash flow to shareholders. The overall growth and income profile is defined by a current phase of revenue contraction and a complete absence of dividend income, characterizing the asset primarily as a growth-oriented equity with high volatility and no current income yield.