Does Generac Holdings Inc. (GNRC) offer a good opportunity for investors?

Generac Holdings Inc. (NYSE: GNRC) stock fell -1.43% on Tuesday to $114.39 against a previous-day closing price of $116.05. With 0.92 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.96 million shares. During the session, the Specialty Industrial Machinery company that operates in wider Industrials sector, reached to the highest price of $116.24 whereas the lowest price it dropped to was $112.00. The 52-week range on GNRC shows that it touched its highest point at $329.50 and its lowest point at $86.29 during that stretch. It currently has a 1-year price target of $149.29. Beta for the stock currently stands at 1.16.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GNRC was down-trending over the past week, with a drop of -0.10%, but this was up by 24.23% over a month. Three-month performance surged to 4.48% while six-month performance fell -52.05%. The stock lost -57.81% in the past year, while it has gained 13.64% so far this year. A look at the trailing 12-month EPS for GNRC yields 6.64 with Next year EPS estimates of 7.14. For the next quarter, that number is 1.77. This implies an EPS growth rate of 51.50% for this year and -16.45% for next year. EPS is expected to grow by 0.42% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 40.60%.

Float and Shares Shorts:

At present, 63.25 million GNRC shares are outstanding with a float of 61.63 million shares on hand for trading. On Oct 13, 2022, short shares totaled 5.04 million, which was 7.89% higher than short shares on Sep 14, 2022. In addition to Mr. Aaron P. Jagdfeld as the firm’s Chairman, Pres & CEO, Mr. York A. Ragen serves as its CFO & Chief Accounting Officer.

Institutional Ownership:

Through their ownership of 94.57% of GNRC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.70% of GNRC, in contrast to 45.65% held by mutual funds. Shares owned by individuals account for 2.96%. As the largest shareholder in GNRC with 10.56% of the stake, The Vanguard Group, Inc. holds 6,688,565 shares worth 6,688,565. A second-largest stockholder of GNRC, T. Rowe Price Associates, Inc., holds 3,313,690 shares, controlling over 5.23% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in GNRC, holding 3,133,390 shares or 4.95% stake. With a 3.06% stake in GNRC, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 1,936,542 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.31% of GNRC stock, is the second-largest Mutual Fund holder. It holds 1,464,501 shares valued at 147.42 million. Vanguard Small Cap Index Fund holds 1.29% of the stake in GNRC, owning 816,675 shares worth 82.21 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GNRC since 25 analysts follow the stock currently. There are 15 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With GNRC analysts setting a high price target of $200.00 and a low target of $75.00, the average target price over the next 12 months is $137.75. Based on these targets, GNRC could surge 74.84% to reach the target high and fall by -34.43% to reach the target low. Reaching the average price target will result in a growth of 20.42% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. GNRC will report FY 2022 earnings on 02/14/2024. Analysts have provided yearly estimates in a range of $9.18 being high and $8.09 being low. For GNRC, this leads to a yearly average estimate of $8.49. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Generac Holdings Inc. surprised analysts by -$0.28 when it reported $1.75 EPS against a consensus estimate of $2.03. The surprise factor in the prior quarter was $0.38. Based on analyst estimates, the high estimate for the next quarter is $2.00 and the low estimate is $1.40. The average estimate for the next quarter is thus $1.78.

Summary of Insider Activity:

Insiders traded GNRC stock several times over the past three months with 8 Buys and 4 Sells. In these transactions, 5,517 shares were bought while 15,434 shares were sold. The number of buy transactions has increased to 46 while that of sell transactions has risen to 47 over the past year. The total number of shares bought during that period was 120,031 while 113,158 shares were sold.

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