Here's How Much You'd Have If You Invested $1000 in Generac Holdings a Decade Ago
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Generac Holdings (GNRC) ten years ago? It may not have been easy to hold on to GNRC for all that time, but if you did, how much would your investment be worth today?
Generac Holdings' Business In-Depth
With that in mind, let's take a look at Generac Holdings' main business drivers.
Headquartered in Waukesha, WI, and founded in 1959, Generac Holdings Inc is a leading manufacturer of backup and prime power generation systems for residential and C&I applications, solar + battery storage solutions, advanced power grid software platforms and services, energy management devices and controls along with engine and battery-powered tools and equipment.
The company has a wide distribution network spanning independent residential dealers, industrial distributors and dealers, national and regional retailers, e-commerce partners, wholesalers, equipment rental companies, equipment distributors, and solar installers. It also boasts a direct sales channel to various individual customers.
Generac broadly classifies its products into three categories depending on the end user types, namely Residential, C&I, and Other products and services.
The Residential business includes automatic standby generators (that run mainly on natural gas and liquid propane), air-cooled engine generators for emergency backup in small to medium-sized homes, and liquid-cooled engine generators for larger homes and small businesses. It also provides remote monitoring system for home standby generators called Mobile Link, offering Wi-Fi-enabled feature to conveniently check the status of generator online, while receiving maintenance and service alerts.
The C&I business includes cleaner-burning natural gas fueled generators and C&I generators that are fueled by diesel and Bi-Fuel.
The Other products and services category primarily comprise aftermarket service parts and product accessories.
Generac has two operating segments — Domestic and International. The Domestic segment (82% of second-quarter 2024 revenues) includes the legacy Generac business and operations that are based in the United States and Canada. The International segment (18%) comprises Latin American export operations and other business units that generate revenues outside the United States and Canada.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Generac Holdings ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2014 would be worth $3,331.90, or a 233.19% gain, as of August 30, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 179.13% and gold's return of 87.86% over the same time frame.
Going forward, analysts are expecting more upside for GNRC.
Generac’s performance is being driven by higher Residential product sales amid declining C&I product revenues. Residential product sales rose 8% year over year in Q2 to $538 million, driven by higher demand for home standby and portable generators. Due to frequent power outages caused by Hurricane Beyl, management has improved its sales expectations for 2024. It now expects revenues to increase 4-8% compared with the earlier guidance of 3-7%. Innovative product launches and strategic acquisitions bode well. The company’s share repurchase policy is noteworthy. Nonetheless, weakness across domestic telecom and national equipment rental customers has led to a 10% fall in C&I product sales. International revenues fell 18% year over year due to weak inter-segment sales and reduced portable generator shipments in Europe.
Over the past four weeks, shares have rallied 6.53%, and there have been 12 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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Generac Holdings Inc. (GNRC) : Free Stock Analysis Report