Generac Holdings Inc. (GNRC) Bundle
Understanding Generac Holdings Inc. (GNRC) Revenue Streams
Revenue Analysis
Generac Holdings Inc. reported $4.15 billion in total revenue for the fiscal year 2023, representing a -5.7% year-over-year decline from 2022.
| Revenue Segment | 2023 Revenue | Percentage of Total Revenue |
|---|---|---|
| Residential Products | $2.37 billion | 57.1% |
| Commercial & Industrial Products | $1.38 billion | 33.3% |
| Other | $400 million | 9.6% |
Revenue Streams Breakdown
- Residential Power Generation: $2.37 billion
- Commercial Power Solutions: $1.38 billion
- Renewable Energy Systems: $240 million
- Energy Storage Solutions: $160 million
Geographic revenue distribution shows 92% of revenue generated in North American markets, with 8% from international markets.
A Deep Dive into Generac Holdings Inc. (GNRC) Profitability
Profitability Metrics Analysis
The company's financial performance reveals critical profitability insights for investors.
| Profitability Metric | 2022 Value | 2023 Value | Change |
|---|---|---|---|
| Gross Profit Margin | 37.4% | 32.6% | -4.8% |
| Operating Profit Margin | 14.2% | 9.7% | -4.5% |
| Net Profit Margin | 10.1% | 6.8% | -3.3% |
Operational Efficiency Metrics
- Revenue: $4.16 billion in 2023
- Cost of Goods Sold: $2.81 billion in 2023
- Operating Expenses: $1.09 billion in 2023
Comparative Industry Performance
| Metric | Company | Industry Average |
|---|---|---|
| Gross Margin | 32.6% | 35.2% |
| Operating Margin | 9.7% | 12.3% |
Earnings Performance
Key earnings indicators for 2023:
- Earnings Per Share: $2.14
- Return on Equity: 11.6%
- Return on Assets: 7.3%
Debt vs. Equity: How Generac Holdings Inc. (GNRC) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
Long-Term Debt Overview
| Debt Category | Total Amount | Percentage of Total Capital |
|---|---|---|
| Long-Term Debt | $1.42 billion | 42.3% |
| Short-Term Debt | $387 million | 11.5% |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 1.85
- Industry Average Debt-to-Equity Ratio: 1.62
- Credit Rating: BB+ (Standard & Poor's)
Financing Breakdown
| Financing Source | Amount | Percentage |
|---|---|---|
| Bank Loans | $892 million | 37.4% |
| Equity Financing | $1.24 billion | 52.1% |
| Convertible Notes | $245 million | 10.5% |
Recent Debt Activity
In 2023, the company refinanced $475 million of existing debt with a new credit facility at lower interest rates, reducing annual interest expenses by 1.2%.
Assessing Generac Holdings Inc. (GNRC) Liquidity
Liquidity and Solvency Analysis
Liquidity ratios provide critical insights into the company's short-term financial health and ability to meet immediate obligations.
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.42 | 1.67 |
| Quick Ratio | 0.89 | 1.03 |
| Working Capital | $384.6 million | $456.2 million |
Cash flow statement highlights reveal significant financial dynamics:
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $212.3 million |
| Investing Cash Flow | -$145.7 million |
| Financing Cash Flow | -$87.5 million |
Key Liquidity Observations
- Current ratio indicates moderate short-term liquidity
- Quick ratio suggests potential challenges in immediate debt coverage
- Positive operating cash flow demonstrates fundamental financial strength
Solvency indicators demonstrate financial stability:
| Solvency Metric | 2023 Value |
|---|---|
| Debt-to-Equity Ratio | 1.85 |
| Interest Coverage Ratio | 4.2 |
Is Generac Holdings Inc. (GNRC) Overvalued or Undervalued?
Valuation Analysis: Is the Company Overvalued or Undervalued?
Current financial metrics provide insights into the company's valuation:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 12.3 |
| Price-to-Book (P/B) Ratio | 2.1 |
| Enterprise Value/EBITDA | 8.7 |
Stock price performance details:
- 52-week low: $98.75
- 52-week high: $230.45
- Current stock price: $145.60
- Price change in last 12 months: -35.2%
Dividend and analyst insights:
| Dividend Metrics | Value |
|---|---|
| Dividend Yield | 1.2% |
| Payout Ratio | 22.5% |
Analyst Recommendations:
- Buy recommendations: 45%
- Hold recommendations: 35%
- Sell recommendations: 20%
Key Risks Facing Generac Holdings Inc. (GNRC)
Risk Factors: Comprehensive Analysis
The company faces multiple significant risk dimensions across operational, financial, and market-related domains.
External Market Risks
| Risk Category | Potential Impact | Probability |
|---|---|---|
| Supply Chain Disruption | $45-65 million potential revenue loss | Medium |
| Raw Material Price Volatility | 12-18% cost increase potential | High |
| Competitive Market Pressure | 7-10% market share risk | High |
Operational Risks
- Manufacturing capacity constraints
- Technology obsolescence risks
- Cybersecurity vulnerability
- Regulatory compliance challenges
Financial Risk Metrics
Key financial risk indicators include:
- Debt-to-Equity Ratio: 1.45
- Current Liquidity Ratio: 1.2
- Interest Coverage Ratio: 3.6
Regulatory Environment Risks
| Regulatory Domain | Potential Financial Impact |
|---|---|
| Environmental Compliance | $20-30 million potential annual investment |
| Energy Efficiency Standards | $15-25 million potential adaptation costs |
Future Growth Prospects for Generac Holdings Inc. (GNRC)
Growth Opportunities
The company's growth potential is anchored in several key strategic areas with concrete market indicators:
- Projected market size for power generation equipment estimated at $32.5 billion by 2027
- Renewable energy backup solutions market expected to grow at 6.8% CAGR through 2026
- Residential generator market anticipated to reach $4.2 billion by 2025
| Growth Segment | Projected Revenue | Market Growth Rate |
|---|---|---|
| Residential Generators | $1.8 billion | 5.3% |
| Commercial Power Solutions | $2.4 billion | 7.2% |
| Renewable Energy Integration | $650 million | 9.5% |
Strategic growth initiatives include:
- Investment of $125 million in R&D for smart grid technologies
- Expansion of manufacturing capacity by 30% in North American facilities
- Development of advanced battery storage solutions with $85 million allocated
Key competitive advantages driving future growth:
- Patent portfolio of 78 active technological innovations
- Market share of 42% in residential backup power systems
- Distribution network covering 5,200 dealer locations nationwide
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