Generac Stock Surges 24% YTD: Stay Invested or Time to Exit?

Generac Holdings Inc. GNRC stock has risen 23.6% year to date, outpacing the Manufacturing General Industrial and the broader Industrial Products market rise of 4.4% and 3.3%, respectively. The S&P 500 composite has gained 13.9% over the same time frame.

Price Performance

The stock was up 4.3% yesterday and closed the session at $191.67 while its 52-week high and low are pinned at $203.25 and $99.50, respectively.

This run-up raises a critical question: Does this signal a time to lock in profits, or is the stock poised for further ascent?

Let us do a deep dive into the company's fundamentals, market drivers and valuation to determine if it is the right time to buy, sell or hold GNRC stock.

GNRC’s Rally Buoyed by Multiple Tailwinds

Generac's impressive year-to-date performance has been fueled by a combination of strong demand trends and operational execution.

Momentum in Residential Products is the driving force for GNRC. It is one of the leading names in the home standby generator market. Significant changes in the energy landscape, drastic climate change, aging power infrastructure and deployment of AI and superfast 5G technology are likely to spur growth opportunities for Generac over the long term.

In the last reported quarter, revenues from Residential Products surged 7% year over year to $574 million. Strong demand for portable generators and higher shipments of residential-energy technology products (ecobee and energy storage systems) were the catalysts. Shipments of energy storage systems increased significantly, driven by strong execution in Puerto Rico. Connected ecobee homes grew to more than 4.5 million, driven by rising energy services and subscription attach rates. ecobee is anticipated to deliver positive profitability for the full year.

Frequent product launches are expected to unlock new growth opportunities as these aid in addressable market expansion and support mix/margin. Generac began taking orders for the next-gen PWRcell 2, with first shipments started in July 2025. It recently unveiled Generac PWRmicro, an installer-friendly microinverter. This power backup solution, coupled with GNRC’s PWRcell 2, ecobee Smart Thermostat and home standby generators, boosts its smart ecosystem of energy products.

Generac Holdings Inc. Price, Consensus and EPS Surprise

Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote

Improving C&I segment sales is another catalyst. C&I revenues totaled $362 million, up 5% year over year, driven by increased shipments to domestic industrial distributors and telecom customers as well as strong growth within Europe. For 2025, C&I sales are now expected to be modestly higher than the previous guidance of flat revenues, driven by second-quarter outperformance and favorable forex rates.

Management expects its entry in the data-center vertical to be a strong business opportunity in the long term for C&I segment amid accelerating investment in data centers and the proliferation of artificial intelligence. In the second quarter, driven by a strong initial reception, the company has developed a significant global pipeline of opportunities and is now building a robust backlog for its new high-output diesel generator product. The company has built a global backlog of more than $150 million in the second quarter.

Can GNRC Navigate the Headwinds?

In the last reported quarter, home standby generator sales were flat year over year. Moreover, GNRC tweaked guidance for Residential Product sales owing to revised pricing assumptions in the home standby generator category, due to revised tariff levels. Residential Product sales are now expected to be slightly lower than the previous guidance of a low single-digit range. Since the home standby category has been the mainstay of the residential segment, muted growth might drag down the overall top-line momentum.

Also, shipments to national and independent rental equipment customers were “soft” in the second quarter, with weakness expected to persist through the latter half of 2025.

Amid intense competition, increasing expenses could eat away at margins. In the last reported quarter, total operating expenses were $305 million, up 12% year over year, caused by higher variable costs due to higher shipment volumes, increased employee costs and ongoing operating expenses related to recent acquisitions. Higher operating costs could affect margin performance if revenues do not meet expectations or strategic efforts do not yield desired results, impacting profitability.

GNRC’s Valuation & Estimate Revision

Generac’s forward 12-month price-to-earnings ratio of 22.43X is higher than the industry average of 20.5X observed in the past year.

Analysts have kept their earnings estimate unchanged in the past 60 days.

Bottom Line: Stay Invested

With both catalysts and headwinds balanced, the stock offers limited upside in the near term. We believe new investors should wait for a better entry point and existing investors should retain GNRC stock, which currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Stocks worth consideration within the same space are Flowserve Corporation FLS, RBC Bearings Incorporated RBC and Trimble Inc. TRMB, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FLS’ 2025 EPS is pegged at $3.37, unchanged in the past seven days. FLS’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, while missing in the other two quarters, with the average surprise being 5.54%. Its shares have declined 12.1% year to date.

The Zacks Consensus Estimate for RBC’s fiscal 2026 earnings is pegged at $11.55 per share, improved by 1 cent in the past seven days. RBC’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with the average surprise being 3.8%. Its shares have gained 24.6% year to date.

The Zacks Consensus Estimate for TRMB’s 2025 EPS is pegged at $2.99. TRMB’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.53%. Its shares have surged 11.4% year to date. 

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This article originally published on Zacks Investment Research (zacks.com).

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