Generac Gears Up to Report Q1 Earnings: Is a Beat in the Cards?

Generac Holdings Inc. GNRC will report first-quarter 2025 results on April 30, before market open. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) 

The Zacks Consensus Estimate for first-quarter revenues is pegged at $918.7 million, up 3.3% from the prior-year reported number. The Zacks Consensus Estimate for earnings is 99 cents per share, up 12.5% year over year. The estimate has moved down 7.5% in the past 60 days.

GNRC beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 14.2%. In the past year, shares of the company have declined 17.8% compared with the Zacks Manufacturing-General Industrial industry’s loss of 9.3%.

Key Factors Influencing GNRC’s Q1 Performance

Generac's residential segment, particularly home standby generators, is likely to have acted as a key catalyst. In the fourth quarter of 2024, residential product sales surged 28% year over year, reaching $743 million, fueled by increased power outages and a growing demand for reliable backup power solutions. Management anticipates continued demand for home standby generators and the adoption of energy technology products like smart thermostats and ecobee products to drive top-line momentum in the first quarter.

The company’s sales are often influenced by extreme weather events that lead to power outages. In 2024, the United States experienced the highest number of power outage hours since 2010, significantly boosting demand for Generac's products. While the first quarter is usually less affected by hurricanes, any unexpected severe weather could positively impact sales. For the first quarter, overall net sales are expected to grow slightly, with strong residential sales partly offset by a high single-digit drop in C&I sales.

AI tailwinds are driving a boom in energy-hungry data centers, increasing demand for power and backup systems. This will strain aging power grids. Generac’s backup solutions are well-positioned to meet rising electricity needs, while its next-gen energy technologies across residential and C&I product categories are set to boost reliability, cut costs and improve comfort across homes and businesses.

Ecobee is growing steadily in the smart thermostat market, backed by expanding partnerships with major retailers. Strong demand for Ecobee products is likely to have aided GNRC’s top-line growth in the first quarter. The company’s PWRcell portfolio, combined with ecobee’s smart energy management and intuitive interface, delivers a unique solution that enhances home energy reliability, efficiency and affordability.

Generac Holdings Inc. Price and EPS Surprise

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

Nonetheless, prolonged weakness in C&I revenues is concerning with sales for 2025 expected to be flat year over year and down in high single digits in the first quarter. This is mainly as growth from telecom C&I BESS and data center opportunities is likely to be offset by declines in rental beyond standby and domestic industrial-distributor shipments. Sales are also expected to be affected by a slight unfavorable impact from the net effect of foreign currency.

The Zacks Consensus Estimate for Residential products' revenues is pegged at $483.5 million. The consensus estimate for C&I products' revenues is $324.6 million.

GNRC’s Key Recent Developments

On April 8, 2025, Generac expanded its robust portfolio with a new range of high-capacity generators specifically designed for the data center market. The lineup includes five powerful generators ranging from 2.25 MW to 3.25 MW, all engineered with modern components and cutting-edge features to ensure seamless performance in mission-critical applications. Its broad and diversified supply chain enhances its ability to handle increasing demand by reducing risks, supporting rapid scaling, providing access to innovations and managing costs effectively. This approach also allows the company to offer competitive lead times of 50–60 weeks for fully packaged generators, helping businesses stay agile and succeed in a constantly evolving market.

On Jan. 6, 2025, Generac’s ecobee launched the Smart Thermostat Essential, a budget-friendly option that maintains the brand's hallmark comfort and convenience. Featuring a sleek full-color touchscreen, this new device is easy to install, simple to use and offers substantial savings. Customers can reduce annual heating and cooling costs by up to 23% (compared to maintaining a constant temperature of 72°F/22°C, actual savings may fluctuate based on factors such as the season, climate zone and rate structure), potentially recovering the device's cost within just six months. It was made available at major retailers and ecobee.com on March 3.

On Jan. 21, 2025, Generac unveiled its newest home standby generator design, featuring the 28kW model, the most powerful air-cooled standby generator on the market. This launch broadens Generac’s range of reliable and efficient air-cooled generators, offering options from 10kW to 28kW. The new models are designed to work seamlessly with other Generac products, such as ecobee smart thermostats and PWRcell battery systems, providing a complete home energy solution.

What Does Our Model Unveil for GNRC?

Our proven model predicts 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 exactly the case here.

Generac has an Earnings ESP of +3.71% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are three other stocks you may want to consider, as our model shows that these too have the right elements to post an earnings beat in this reporting cycle.

Sprouts Farmers Market, Inc. SFM currently has an Earnings ESP of +0.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sprouts Farmers Market is scheduled to report quarterly earnings on April 30. The Zacks Consensus Estimate for SFM’s to-be-reported quarter’s earnings and revenues is pegged at $1.53 per share and $2.19 billion, respectively. Shares of SFM have gained 148.9% in the past year.

Expeditors International of Washington EXPD has an Earnings ESP of +3.76% and a Zacks Rank #3 at present. EXPD is scheduled to report first-quarter 2025 earnings on May 6.  

The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.43 billion and $1.30 per share, respectively. EXPD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 11.6%.

Church & Dwight Co. CHD has an Earnings ESP of +0.66% and a Zacks Rank #3 at present. CHD is scheduled to report first-quarter 2025 earnings on May 1.  

The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $1.51 billion and 89 cents per share, respectively. CHD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 9.6%.

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

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