Contrarian Value Ideas

[gfp927z]

Derf, Just curious if you see GNRC finally getting some buoyancy? The chart is starting to look interesting, as if the bottom is likely in. But after reading that company insiders are still selling their own shares, and haven't bought any stock for eons, that doesn't exactly inspire confidence. Still, the chart is looking like a bounce to 150 might be coming. Beyond that is tough to say though, since it may just stall out there (150) like it did last summer.

I owned some GNRC during its big 2020-21 runup, but really don't have a good feel for their business, and their margins are lower than I usually like to see (4.7%, 9.8%). Yahoo Finance has the short position at just over 5%, which I guess is not surprising since the stock has been the doghouse for over two years. I see their earnings are due on Wed (article below). Just curious if you see the stock getting back on track? Thanks for any insights / opinions -


>>> Factors to Note Ahead of Generac's (GNRC) Q4 Earnings Release


Zacks Equity Research

February 12, 2024


https://finance.yahoo.com/news/factors-note-ahead-generacs-gnrc-152200410.html


Generac Holdings Inc GNRC will report fourth-quarter 2023 results on Feb 14.

The Zacks Consensus Estimate for quarterly revenues is pegged at $1.10 billion, indicating a year-over-year increase of 4.6%. The consensus estimate for earnings is pegged at $2.09 per share, suggesting a 17.4% rise year over year.

GNRC beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average earnings surprise of 7.1%. In the past year, shares of the company have gained 3.8% against the sub-industry’s decline of 44.2%.

Key Factors

Generac’s performance is likely to have benefited from continued strength in the Commercial & Industrial (C&I) product shipments and solid growth in home standby generator shipments. The Zacks Consensus Estimate for C&I products' revenues is pegged at $372 million, implying 12% year-over-year growth.

The company’s Residential Energy Technology Products and Solutions segment is likely to have benefited from solid sales of Ecobee. The company announced that Ecobee smart thermostats can now be integrated with Generac 4G LTE Cellular Propane Tank Monitors to monitor fuel levels in the propane tank from the smart thermostat screen.

Apart from this, the ongoing grid stability concerns and volatile energy markets will drive shipments of natural gas generators used in applications beyond traditional emergency standby projects.

In the quarter under review, the company announced that it had made a minority investment in a leading smart electric vehicle charging and energy management company — Wallbox. The partnership will improve Generac’s distribution capacity in the United States by providing its customers with Wallbox's range of EV charging solutions, which includes L2 AC chargers and its bidirectional charger, Quasar 2.

However, Generac’s performance is likely to have been affected by demand softness in Residential products owing to gradual field inventory levels of home standby generators. Also, portable generator sales are likely to decrease year over year due to elevated year-ago sales, which include the impact of Hurricane Ian. The Zacks Consensus Estimate for Residential products' revenues is pegged at $606 million, suggesting a 4.3% plunge year over year.

What Our Model Says

Our proven model does not predict an earnings beat for Generac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.

Generac has an Earnings ESP of -5.94% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

<<<



---