GNRC - Embedded Expectations Analysis - 2020 02 05
ï€ Generac Holdings Inc. (GNRC:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 20.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about clean energy products, the demand for home standby generators, and macro headwinds in their international commercial and industrial generator segmentï€ Specifically, management may lack confidence in their ability to service demand for clean energy products, expand their power storage, and sustain core and portable generator sales growth. Moreover, they may be exaggerating the potential of the home standby generator market, the demand for decentralized power generation assets, and the capabilities of their installation contractors. They may also be concerned about telecom capex spending, potential macro headwinds in their international commercial and industrial generator segment, and underdeveloped distribution in Northern California. Finally, they may be exaggerating the sustainability of connectivity rate increases with Mobile Link and their ability to improve installation costs for home electrical systems
Generac Holdings is a designer and manufacturer of a range of power generation equipment and other power products serving the residential, light commercial and industrial markets. The company's products include residential, commercial and industrial standby generators, as well as portable and mobile generators used in a range of applications. Other engine powered products that the company designs and manufactures include light towers which provide temporary lighting for various end markets; commercial and industrial mobile heaters and pumps used in the oil and gas, construction and other industrial markets; and a product line of outdoor power equipment for residential and commercial use.
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