Start here if you're new
what it is
Generac sells backup power gear, from home generators to industrial units and engine-powered equipment.
how it gets paid
Last year Generac made $4.2B in revenue. residential standby generators was the main engine at $1.80B, or 43% of sales.
why growth slowed
Revenue fell 2.0% last year. Leadership anticipates strong demand from data center customers to further accelerate throughout 2026.
what just happened
Generac missed estimates, with EPS at $1.61 versus $1.92 expected.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
50/100 earnings predictability — expect surprises
36.3x trailing p/e — you're paying up for this one
12.5% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
Generac sells backup power gear, from home generators to industrial units and engine-powered equipment.
When your power goes out, you buy reliability first and haggle later. Generac sells through independent dealers, retailers, wholesalers, and rental companies, so the brand shows up where you actually shop. That distribution muscle supports a $4.2 billion revenue base and a workforce of 9,239 people.
How they make money
$4.2B
annual revenue · their business grew -2.0% last year
residential standby generators
$1.80B
4.0%
portable generators
$0.80B
6.0%
commercial & industrial products
$0.90B
+10.0%
mobile products and light towers
$0.40B
+3.0%
other engine-powered equipment
$0.30B
+1.0%
The products that matter
home backup power systems
Residential standby generators
$2.9B residential segment · 70% share
this is the core franchise. it anchors the 70% share position in home standby power and still accounts for the biggest revenue pool on the page.
the cash engine
backup power for business sites
Commercial & Industrial
$400M · +10% from a year ago
this is the second-act bet. at $400M, it is small next to residential, but management wants it to double in three to five years.
the re-rating bet
rental and job-site equipment
Mobile Power & HVAC
$100M+ expected 2026 sales from Allmand
allmand adds portable light towers and heaters. it is not the whole story, but $100M+ of expected 2026 sales gives the commercial push more breadth.
bolt-on scale
Key numbers
36.3x
trailing p/e
P/E → price compared with last year's earnings → so what: you are paying a luxury multiple for a company with a 6.9% operating margin.
$1.3B
long-term debt
Debt equals 9% of capital, which means the balance sheet looks usable, not reckless.
$8.0B
2029 sales goal
The 2029 revenue estimate is $8 billion versus $4.2 billion today, which tells you how much future growth is already carrying the story.
12.5%
return on capital
Return on capital → profit earned on the money used in the business → so what: 12.5% is decent, but not high enough to justify any price.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 20 / 100
- long-term debt $1.3B (9% of capital)
- net profit margin 7.5% — keeps 8 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in GNRC 3 years ago → it's now worth $18,890.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Generac missed estimates, with EPS at $1.61 versus $1.92 expected.
The miss was 16.15%, even as reported revenue reached $3.1 billion and gross margin was 39.0%. That is the kind of mixed print premium stocks struggle to hide.
$1.05B
revenue
$1.61
eps
39.0%
gross margin
the number that mattered
The 16.15% EPS miss mattered most because expensive stocks need clean beats, not excuses.
-
generac holdings is generating momentum within its commercial & industrial (c&i) segment.
-
decemberinterim c&i product sales increased 10%, to $400 million, compared to $363 million in the prior-year period.leadership anticipates strong demand from data center customers to further accelerate throughout 2026, as the company continues to further its position as a key supplier to multiple hyperscale customers. generac is now focused on increasing capacity for the production of largemegawatt generators, given its recent purchase of an additional manufacturing facility in sussex, wisconsin. the facility complements a new state-of-the-art plant in beaver dam, wi and expanded operations in oshkosh, wi. the rapid, global expansion of data centers has led to robust demand for generac’s reliable and scalable power solutions, thereby presenting management with the opportunity to achieve its stated goal of doubling c&i product sales over the next three to five years.
-
generac has been active on the acquisition front.the company completed the purchase of allmand brothers, inc., a division of briggs & stratton, in early january. the acquisition strengthens generac’s mobile, rental-focused power equipment offerings, including portable light towers and heaters, that are utilized in construction markets.
-
we expect allmand to contribute over $100 million in incremental c&i product sales in 2026.separately, in early february, generac also announced a definitive agreement to acquire enercon engineering, inc., a manufacturer of custom power equipment and industrial enclosures that will further aid in scaling capacity to meet the burgeoning demand for the company’s c&i products.
-
we expect the transaction to close during the second quarter, pending regulatory approvals.
source: company earnings report, 2026
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What could go wrong
your biggest risk is the commercial ramp arriving slower than the multiple. GNRC already trades at 36.3x earnings while the business investors are fixated on is only $400M today.
med
data center demand fails to scale
Management wants to double commercial and industrial sales in three to five years. If the $400M business stops growing above 10%, the premium multiple has nothing new to hold on to.
The market is paying for future mix improvement. If that mix does not improve, the stock gets judged on the slower core business again.
med
residential softness lasts longer
Residential products still brought in $2.9B and fell 5%. That bigger segment still sets the earnings base, even if investors prefer to talk about the smaller commercial story.
You do not need commercial weakness to get hurt. Flat-to-down residential demand can do the job on its own.
med
integration and capacity spending arrive before revenue
Allmand is expected to add $100M+ of 2026 sales, and Enercon still needs to close. New plants and bolt-on deals help only if they turn into shipped product instead of higher overhead.
You could get expense growth first and revenue growth later. Public markets rarely clap for that sequence.
med
margin pressure makes the valuation look silly
Gross margin is 39.0%, and Q4 already showed that legal costs and mix can drag it down. If gross margin slips again while the stock stays expensive, the math gets ugly fast.
Premium multiples and shrinking margins do not travel well together.
If commercial growth fails to outrun residential softness, you are left owning a 36.3x earnings stock without the cleaner growth mix the market is paying for.
source: institutional data · regulatory filings · risk analysis
Pay attention to
next earnings
commercial growth above $400M
The whole re-rating story needs the $400M commercial business to keep growing faster than the core.
Q2 2026
Enercon deal close
If the deal closes on schedule, Generac adds more custom power equipment capacity. If it slips, the commercial build-out slows.
margin
39.0% gross margin
One soft quarter is noise. Two starts to tell you the mix shift is not translating into better earnings quality.
residential
core demand after storm season
The residential segment is still $2.9B. If it stays soft, the smaller growth story has to work much harder.
Analyst rankings
earnings predictability
50 / 100
Results are harder to model than the average stock. In human-speak: expect a few messy quarters.
risk rank
3
Safer than about half the market. You are not buying distress, but you are not buying a bunker stock either.
source: institutional data
Institutional activity
248 buyers vs. 325 sellers in 4q2025. total institutional holdings: 53.2M shares.
source: institutional data
Price targets
3-5 year target range
$80
$307
$230
current price
$194
target midpoint · 16% from current · 3-5yr high: $375 (+65% · 13% ann'l return)
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