Generac Holdings Inc. shares are trading close to a resistance zone which currently limits any upside potential. We expect that this level will be broken due to the stock's technical chart pattern.
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
● Its core activity has a significant growth potential and sales are expected to surge, according to Standard & Poor's' forecast. Indeed, those may increase by 46% by 2022.
● The company returns high margins, thereby supporting business profitability.
● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
● Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
● 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.
● The tendency within the weekly time frame is positive above the technical support level at 146.21 USD
Weaknesses
● The stock is close to a major daily resistance at USD 254.5, which should be gotten rid of so as to gain new appreciation potential.
● The company's enterprise value to sales, at 6.6 times its current sales, is high.
● With an expected P/E ratio at 47.84 and 39.25 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
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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.