After several weeks of decline, shares in Generac Holdings Inc. are approaching an important technical support area around 332.23 USD on the weekly chart. These levels represent attractive entry points.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
Strengths
● The prospective high growth for the next fiscal years is among the main assets of the company
● The earnings growth currently anticipated by analysts for the coming years is particularly strong.
● The group's high margin levels account for strong profits.
● The company is in a robust financial situation considering its net cash and margin position.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
● The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.
● Predictions on business development from analysts polled by Standard & Poor's are tight. This results from either a good visibility into core activities or accurate earnings releases.
Weaknesses
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 41.12 times its estimated earnings per share for the ongoing year.
● The company's enterprise value to sales, at 6.12 times its current sales, is high.
● The company appears highly valued given the size of its balance sheet.
● The valuation of the company is particularly high given the cash flows generated by its activity.
● For the last four months, EPS estimates made by Standard & Poor's analysts have been revised downwards.
● The average consensus view of analysts covering the stock has deteriorated over the past four months.
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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.