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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Generac Holdings Inc. (XNYS:GNRC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GNRC
Name:
GENERAC HOLDINGS INC. (XNYS:GNRC)
Sector:
- 38342.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Aaron Jagdfeld
Total Employees:
8,955
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.30% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GENERAC HOLDINGS INC.(GNRC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
223.39
One Month Price Target:
$225.05
Six Month Price Target :
$233.35
Likely Price in One Year's Time:
Ticker:
$243.31
Likely Trading Range Today Under (Normal Volatility)
$222.51
Price Upper limit ($) :
$225.05
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$208.39
This week:
$189.85
This month :
$156.32
Other Primary facts
Market Cap:
14.39B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
63.83M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.36%
-12.2%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$292.90
$260.42
$153.88
$186.36
Medium risk (<10%) entry points
Buy Call
Sell Call
$249.85
Buy Put:
Sell Put:
$242.92
$196.84
$203.86
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GNRC
Sharpe Ratio:
4.92%
Comparison:
GNRC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 159.46% higher than the industry
& ratio is 115.68% higher than the market/S&P 500 average
Average Returns/Yield of
GNRC
Daily returns:
0.17%
Weekly returns:
0.87%
Monthly returns:
3.47%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 156.59% above industry average
Classification:
GNRC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.61
Statistical test of Returns:
GNRC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.35%
Weekly Volatility:
7.50%
Monthly Volatility:
15.00%
Yearly Volatility:
51.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.64%
Volatility in last five trading days has been 38.29% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.71%
Weekly VaR:
-15.01%
Monthly VaR:
-30.03%
How Much Can the price of
GNRC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$168.54
This translates to price declining to:
$33.51
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
GNRC is a 111.92% riskier investment compared to the market/S&P 500 & is 81.55% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 22.58% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GNRC
Beta in relation to market/S&P 500--1.33
Expected beta in 1 year's time:
1.104
Expected beta in 3 year's time:
1.561
Unlevered (debt free) Beta:
0.902
Beta in relation to Nasdaq (XNAS):
1.225
Beta in relation to all global stocks::
0.818
Beta Comparison & Analysis
Beta of competitors/peers::
1.209
Beta is 9.74% higher than peers
Average Industry Beta:
1.281
Beta is 3.54% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
33.24%
Sustainable growth rate is 123.28% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.295
Alpha is 581.68% above industry average alpha yield
Alpha is 1875% higher than market/& is unsustainably high
Analysis of Cost of Capital of
GNRC
Equity cost of capital:
0.122
Equity cost of capital is 2.60% above industry mean WACC
Unlevered (without debt) cost of capital:
8.32%
Before-tax cost of debt:
2.41%
After-tax cost of debt:
1.90%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.90%
WACC is -75.86% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$63.69
Revenue growth rate per share of (3Y):
5.99
Annual revenue growth rate is 299.39% above the industry average
EPS:
$7.55
Expected Annual growth rate of EPS (3Y):
27.96%
Expected future EPS growth rate is 816.90% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$2.10
-
-
Debt per share
$21.22
EBITDA per share
$11.93
Valuation Analysis Today of
GNRC
P/E Ratio:
28.84
P/E Ratio of Competitors/Peers:
29.65
P/E ratio is -2.72% lower than main peers & is 4.83% higher than the industry
Stock price/value with industry average P/E ratio: $207.73
GNRC is 7.54% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.51
Price to sales ratio is -15.48% below the industry mean
P/B (Price to book value ratio):
5.99
Price to free cash flow: 106.28
Price to free cash flow ratio is 132.59% higher than the industry
Net income growth rate (3Y):
120.22%
Net income growth rate is 8831.26% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
58.68%
Net debt to equity ratio:
53.62%
Debt to assets ratio:
26.29%
Net debt to assets ratio:
24.03%
Debt-to-asset ratio is -51.27% below industry average
Ability to repay debt:
Interest coverage ratio:
21.89
Interest coverage ratio is 12.17% more than industry average
Looking forward:
Debt growth rate:
53.67%
Annual debt growth is -28% lower than industry average debt growth rate
Debt repayment rate in last quarter: 8.53%
Analysis of Key Statistics
Correlation of price movement with the market:
0.63
Statistical significance of correlation:
GNRC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is -0.84% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
-0.03
Covariance of price movement with the market:
-0.059
Kurtosis
1.281
Returns are more concentrated around the mean (platykurtic), compared to a normal distribution
Skewness of returns:
0.153
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GNRC
Gross Profit Margin Ratio:
138%
Operating Profit Margin Ratio:
16.89%
Operating profit margin is -169.75% lower than the industry
Net Profit Margin Ratio:
138%
Effective Tax Rate:
19.67%
Effective tax rate is 5.27% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.06%
Return on equity (ROE) is 526.90% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.44%
Return on assets (ROA) is 101.09% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.7
Current ratio is -43.86% below industry average
Cash Conversion Cycle (days):
-8.9
Cash conversion cycle is -114.45% below industry average
The remaining useful life of property plant & equipment is: 0.8 years
Stock based compensation to net income ratio:
1.82%
In-depth Efficiency Analysis
Revenue generated per employee:
454.0K
Each employee generates -88% less revenue than industry average revenue per employee
EBITDA generated per employee:
85.0K
Each employee generates -89% less EBITDA than industry average revenue per employee
Profit generated per employee:
54.3K
Each employee generates -86% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 4.3K
Each employee generates -108% less free cash flow than industry average revenue per employee
Assets/Capital per employee
337.9K
Each employee generates -108% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 29.97%
Growth rate in R&D investment/expenditure is 177.66% higher than the industry
Competitors/Peer firms of
GNRC
XYLEM INC. (XNYS:XYL)
HEICO CORPORATION (XNYS:HEI)
HEI-A
CNH Industrial NV (XNYS:CNHI)
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (XNYS:WAB)
JACOBS SOLUTIONS INC. (XNYS:J)
AVERY DENNISON CORPORATION (XNYS:AVY)
IDEX CORPORATION (XNYS:IEX)
TEXTRON INC. (XNYS:TXT)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.07B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.67B
1.40B
121.66M
153.35M
502.18M
348.84M
66.96M
690.80M
-
34.78M
112.27M
761.43M
686.75M
486.19M
651.72M
128.20M
486.19M
Statement of Cash Flow
Date:
Period:
38.46M
Differed Income Tax :
- 49156.00K
Stock Based Compensation :
8.83M
Change in Working Capital :
- 118790.00K
Accounts Receivables:
- 66510.00K
Other Working Capital:
- 14103.00K
Other Non-Cash Items:
- 6380.00K
Net Cash Provided by Operating Activities:
- 10142.00K
Investments in PP&E:
-
Net Acquisitions:
- 3920.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
206.02M
-
206.02M
609.87M
1.24B
72.74M
2.13B
593.61M
1.41B
1.01B
-
11.78M
-
3.03B
-
5.15B
697.49M
89.27M
-
-
466.40M
1.25B
1.35B
-
1.52B
-
2.77B
727.00K
2.07B
- 46402.0K
-
March 31, 2022 at 6:00:00 AM
3.36B
2.31B
5.08B
-
1.44B
1.2B
2.88M
- 26336.00K
- 27375.00K
- 126346.00K
-
-
-
221.95M
95.60M
600.00K
58.68M
206.02M
147.34M
- 10142.00K
- 28200.00K
- 38342.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GNRC
2023
2024
2025
2026
2027
$293.35
$319.51
$347.99
$379.02
$412.81