Generac Holdings Inc.

GNRC

Motors & Generators

Mkt Cap

$9.053B

PE

39.63

Debt

$1.518B

Cash

$249.4M

EV

$10.32B

FCF

$520.2M

Market Cap

$9.053B

P/E Ratio

39.63

Debt

$1.518B

Cash

$249.4M

EV

$10.32B

FCF

$520.2M

Charts data: {"Earnings":[{"time":"2014-12-30","value":174613000},{"time":"2015-12-30","value":77747000},{"time":"2016-12-30","value":98788000},{"time":"2017-12-30","value":159386000},{"time":"2018-12-30","value":238257000},{"time":"2019-12-30","value":252007000},{"time":"2020-12-30","value":347218000},{"time":"2021-12-30","value":550494000},{"time":"2022-12-30","value":399502000},{"time":"2023-12-30","value":214606000}],"Sales":[{"time":"2014-12-30","value":1460919000},{"time":"2015-12-30","value":1317299000},{"time":"2016-12-30","value":1447743000},{"time":"2017-12-30","value":1679373000},{"time":"2018-12-30","value":2023464000},{"time":"2019-12-30","value":2204336000},{"time":"2020-12-30","value":2485200000},{"time":"2021-12-30","value":3737184000},{"time":"2022-12-30","value":4564737000},{"time":"2023-12-30","value":4022667000}],"Net Margins":[{"time":"2014-12-30","value":0.11952271138920091},{"time":"2015-12-30","value":0.05902000988386084},{"time":"2016-12-30","value":0.06823586783013283},{"time":"2017-12-30","value":0.09490804008400755},{"time":"2018-12-30","value":0.11774709112689921},{"time":"2019-12-30","value":0.11432331550181098},{"time":"2020-12-30","value":0.1397143087075487},{"time":"2021-12-30","value":0.147301818695574},{"time":"2022-12-30","value":0.08751917142214327},{"time":"2023-12-30","value":0.05334918351432023}],"Assets":[{"time":"2014-12-30","value":1882542000},{"time":"2015-12-30","value":1792816000},{"time":"2016-12-30","value":1861684000},{"time":"2017-12-30","value":2019964000},{"time":"2018-12-30","value":2426314000},{"time":"2019-12-30","value":2665669000},{"time":"2020-12-30","value":3235423000},{"time":"2021-12-30","value":4877780000},{"time":"2022-12-30","value":5169462000},{"time":"2023-12-30","value":5093312000}],"Stockholders Equity":[{"time":"2014-12-30","value":489799000},{"time":"2015-12-30","value":465871000},{"time":"2016-12-30","value":401122000},{"time":"2017-12-30","value":559831000},{"time":"2018-12-30","value":761261000},{"time":"2019-12-30","value":1032851000},{"time":"2020-12-30","value":1390293000},{"time":"2021-12-30","value":2214087000},{"time":"2022-12-30","value":2259255000},{"time":"2023-12-30","value":2343070000}],"ROE":[{"time":"2014-12-30","value":0.3564992986919124},{"time":"2015-12-30","value":0.1668852536431759},{"time":"2016-12-30","value":0.24627918688079936},{"time":"2017-12-30","value":0.284703776675461},{"time":"2018-12-30","value":0.3129767582997159},{"time":"2019-12-30","value":0.24399163093224482},{"time":"2020-12-30","value":0.2497444783221954},{"time":"2021-12-30","value":0.2486325063107276},{"time":"2022-12-30","value":0.1768290874646731},{"time":"2023-12-30","value":0.09159180050105203}],"ROA":[{"time":"2014-12-30","value":0.16232147808654468},{"time":"2015-12-30","value":0.1001558442137955},{"time":"2016-12-30","value":0.10990963020577069},{"time":"2017-12-30","value":0.12429132400379413},{"time":"2018-12-30","value":0.14721136670686483},{"time":"2019-12-30","value":0.1396133578475047},{"time":"2020-12-30","value":0.14808141006600992},{"time":"2021-12-30","value":0.14784102604053484},{"time":"2022-12-30","value":0.1095529863649254},{"time":"2023-12-30","value":0.07582472858525062}]}

Generac Holdings Inc. designs, manufactures, and sells power generation equipment, energy storage systems, energy management devices and solutions, and other power products for the residential, light commercial, and industrial markets worldwide. The company offers residential automatic standby generators, automatic transfer switch, air-cooled engine residential standby generators, and liquid-cooled engine generators; residential storage solution consists of a system of batteries, an inverter, photovoltaic optimizers, power electronic controls, and other components; Mobile Link, a remote monitoring system for home standby generators; smart home solutions, such as smart thermostats and a suite of home monitoring products; smart water heater controllers; residential clean energy solutions; and portable and inverter generators; outdoor power equipment, including trimmers, field and brush mowers, log splitters, stump grinders, chipper shredders, lawn and leaf vacuums, and pressure washers and water pumps; and battery-powered turf care products. It also provides commercial and industrial products comprising cleaner-burning natural gas fueled generators; light-commercial standby generators and related transfer switches; stationary generators and related transfer switches; single-engine industrial generators; industrial standby generators; industrial transfer switches; light towers, mobile generators, and mobile energy storage systems; and aftermarket service parts and product accessories. The company distributes its products through independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, electrical, HVAC and solar wholesalers, catalogs, equipment rental companies and distributors, and solar installers; and directly to end users. The company was founded in 1959 and is headquartered in Waukesha, Wisconsin.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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3/31/22
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12/31/19
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Generac Holdings Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$520.2M	$528.4M	$536.6M	$545M	$553.5M	$562.2M	$571M	$579.9M	$589M	$598.2M	$607.6M	$6.076B
DCF		$459.4M	$405.8M	$358.4M	$316.5M	$279.5M	$246.9M	$218M	$192.5M	$170M	$150.2M	$1.502B
Value	$4.299B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 20%

Earnings Stability 57%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	5.9%	6.8%	9.5%	12%	11%	14%	15%	8.8%	5.3%	5.7%
ROA	10%	11%	12%	15%	14%	15%	15%	11%	7.6%	8%
ROE	17%	25%	28%	31%	24%	25%	25%	18%	9.2%	9.6%

What is the average Net Margin?

The average Net Margin over the past 5 years is +11%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.13%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +12.8%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.28%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +22.06%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -3.74%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	6.81	4.66	4.19	4.74	3.61	2.08	3.23	-51.31	3.90	2.92
Debt Equity	2.31	2.59	1.71	1.24	0.87	0.63	0.44	0.63	0.65	0.64
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	50%	50%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.92.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -4.80.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.50.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	16%	15%	17%	-12%	1.5%
Net Income	12%	-2.1%	-15%	-46%	-2.4%
Stockholders Equity	29%	25%	19%	3.7%	2%
FCF	8.4%	14%	-2.6%	-	2.8%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +14.73%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.49%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -2.07%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -2.4%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +25.21%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +2%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +14.49%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +2.78%.