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BRAZIL – 06/16/2021: A Generac Holdings Inc. (Generac) logo is visible on a smartphone and in the backdrop in this picture illustration. (Image courtesy of Rafael Henrique/SOPA Images/LightRocket/Getty Images)
Getty Images/SOPA Images/LightRocket
[Revised on 7/2/2021] The value of the GNRC stock has increased. We explained a few weeks ago how Generac Holdings (NYSE: GNRC) stock could continue to rise in the near term due to increased demand for home generators. Since then, the stock has increased by 17 percent. The company is benefiting from a number of positive factors, including continued demand for its home generators, a rebound in commercial demand as the Covid-19 crisis fades away, its Deep Sea acquisition to improve its generator automation capabilities, and a greater focus on solar-powered generators. These factors were covered in our recent Generac update (below). The business also just unveiled its new V20 Pro model, which combines all of the diesel, battery, hybrid, main power, and solar choices into a one machine. This should help the company’s commercial side in the future quarters.
Will GNRC stock continue to increase after a significant gain of 29 percent in twenty-one trading days, or will it fall? According to past performance, the stock of GNRC is more likely to fall in the coming month. In the last 10 years, GNRC stock has seen 48 instances of a twenty-one day surge of 29 percent or more, 31 of which have led in GNRC stock decreasing over the following one month period (twenty-one trading days). This historical pattern predicts a fall in GNRC stock in 31 of 48 months, or around 65 percent of the time. Investors can seek for any dips in the GNRC stock price to buy for bigger gains, based on historical performance. For additional information, see our Generac Holdings Stock Decline Chances study.
Using data from the previous 10 years, the ‘Event Probability’ and ‘Chance of Rise’ were calculated.
After a five-day move of 2.2 percent or more, the stock rose 54 percent of the time in the following five days.
On 53 percent of the times when the price moved 12.0% or more in a ten-day period, the stock climbed in the following ten days.
Only 35% of the time after moving 29.0% or more in a twenty-one-day period, the stock rose in the next twenty-one days.

Generac Holdings Stock Return Prediction: AI Predicts GNRC Average and Excess Return After a Fall or Rise
Stock Returns of Generac Holdings (Recent) Compared To Peers And The S&P500
AOS had the best five-day return of 5.8%, while SPY had the lowest at 1.3 percent.
GNRC has the best ten-day return at 12.0%, while FELE has the lowest at -0.4%.
GNRC has the highest return of 29.0 percent, while FELE has the lowest return of -5.8%.

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[Updated on June 15, 2021] Factors Affecting GNRC’s Stock Price
We feel that Generac Holdings, an industrial firm that manufactures power backup generators, has further space for development at present prices of $355, despite the fact that it is up a staggering 4.5x from its low of under $80 on March 23, 2020, when the broader markets bottomed. The stock of GNRC has increased by 4.5 times, compared to a 90 percent increase in the S&P 500. Given recent greater power outages, the remarkable outperformance of GNRC stock can be linked to exceptional demand for its home standby generators. As a result, the corporation has been reporting positive earnings in recent quarters.
The stock of GNRC has likewise increased by 617 percent since its low point of $50 in late 2017. Given the company’s strong fundamentals, the rise over the last three years is fair. Generac’s overall revenue in 2020 will be $2.5 billion, up from $1.7 billion in 2017. This is due in part to a considerable increase in home demand for power backup generators, which is outperforming the business segment’s fall, notably in 2020, due to the impact of the Covid-19 pandemic. In addition, the company’s net margins increased by 470 basis points to 14.1 percent in 2020, up from 9.4 percent in 2017, resulting in a 122 percent increase in net income. Over this time, the company’s total shares increased by 1.4 percent, while earnings per share increased by 119 percent to $5.61 in 2020, compared to $2.56 in 2017. Generac’s P/E multiple has increased from 19x in 2017 to 40x in 2020, owing to robust earnings growth in recent years. The underlying numbers can be found in our dashboard, ‘What Factors Driven 617 Percent Change In Generac Holdings Stock Between 2017 and Now?’
So, what’s the most likely upside trigger and when will it happen?
Generac has had a fantastic year in 2020, thanks to a surge in demand for home standby generators and portable generators. This is due to an increase in power outages, as well as nationwide stay-at-home orders, which have raised concerns about power reliability for residential customers. Increased exports of the company’s solar power storage and backup solution – PWRcell energy storage devices – also helped. Increased residential items in the sales mix has resulted in increased margins, which is projected to continue in the future.
While the commercial side of the business will experience a reduction in 2020, owing to the impact of Covid-19 and the closure of some offices in favor of work-from-home, the company predicts a significant increase in demand for power backup solutions as 5G becomes more prevalent. [1] With the expansion of 5G, there will be a greater demand for power backup. With almost 43% of the US population being completely vaccinated, demand for commercial generators is expected to surge as offices gradually open.
Generac also announced the $425 million acquisition of Deep Sea Electronics Ltd., situated in the United Kingdom. Generator controllers, automated transfer switch controllers, battery chargers, and vehicle and off-highway controllers are all made by Deep Sea Electronics. With items marketed in 150 countries, the corporation has a wide distribution network. Generac will be able to enhance its capability in generator controls and automation as a result of this acquisition.
Generac is well positioned to gain from the growing demand environment, 5G deployment, and increased attention on greener energy in general. In recent years, the corporation has generated excellent earnings growth. Generac’s profits per share and adjusted earnings increased by 37% to $6.47 in 2020, up from $4.70 in 2018. Given the demand outlook, earnings are expected to grow at a substantially faster rate, reaching $11.22 in 2022, representing a 73 percent increase between 2020 and 2022. The increase in P/E multiple is fair given the excellent profits growth. As a result, we anticipate GNRC stock will continue to gain despite a big 4.5x increase in the last year or so. In fact, the current average price prediction for GNRC is $404, which is a 13% premium over the current market price of $355.
While the price of GNRC stock may rise, the year 2020 has created a number of pricing discontinuities that could provide lucrative trading opportunities. For example, the stock value for Techne vs Generac Holdings is quite counter-intuitive.
Here you may find all of Trefis’ Featured Analyses and Trefis Data./nRead More

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