Shareholders might have noticed that Generac Holdings Inc. (NYSE:GNRC) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.8% to US$146 in the past week. It looks like a credible result overall - although revenues of US$998m were in line with what the analysts predicted, Generac Holdings surprised by delivering a statutory profit of US$0.97 per share, a notable 11% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Generac Holdings

Following the latest results, Generac Holdings' 24 analysts are now forecasting revenues of US$4.22b in 2024. This would be a satisfactory 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 32% to US$5.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.18b and earnings per share (EPS) of US$4.73 in 2024. So the consensus seems to have become somewhat more optimistic on Generac Holdings' earnings potential following these results.

The consensus price target was unchanged at US$149, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Generac Holdings, with the most bullish analyst valuing it at US$177 and the most bearish at US$78.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Generac Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% annually. So it's pretty clear that, while Generac Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Generac Holdings' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$149, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Generac Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Generac Holdings analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Generac Holdings has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com