The timing appears opportune to go long in shares of Generac Holdings Inc. as we anticipate another pick-up in the underlying trend.
Summary
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● The company has solid fundamentals for a short-term investment strategy.
Strengths
● Growth progress expectations are rather promising. Indeed, sales are expected to rise sharply in the coming years.
● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
● Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● Over the last seven days, analysts have been revising upwards their EPS estimates for the company.
● For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 133.93 USD
Weaknesses
● With an enterprise value anticipated at 5.66 times the sales for the current fiscal year, the company turns out to be overvalued.
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 43.86 times its estimated earnings per share for the ongoing year.
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Generac Holdings, Inc. specializes in the design, manufacture and marketing of primary and backup power generation solutions for the residential, commercial and industrial sectors. The group's products include generators, energy storage devices, electricity control systems, electrical equipment, etc. Net sales break down by family of products as follows:
- equipment for the residential sector (51.3%): backup, portable and motorized generators powered by natural gas, propane or fuel, switches, etc.;
- equipment for the industrial and commercial sectors (37.2%): stationary, containerized, industrial and backup generators fueled by natural gas, propane, fuel, etc., advanced systems and energy control software platforms, switches, modular power systems, etc.;
- other (11.5%).
The United States account for 81.4% of net sales.