GNRC Generac Holding Inc

Generac Holdings Inc (GNRC) recently raised it outlook, which sent estimates and shares higher. Valuations are looking good and the company is growing organically and through acquisition.

Company Description

Generac makes backup power generation products serving residential, light commercial and industrial markets.

Raising the Bar

One of the best things a company can do for its share price is to raise its outlook and Generac did just that on Sep 26. The company said that given the recent impact of wide spread outages the second half of the year should be better than anticipated.

Analysts quickly raised their forecasts as well. The Zacks Consensus Estimate for this year is up 9 cents on the news, to $1.77. Next year's average projection is up 11 cents, to $2.02.

Those upward revisions and the last earnings surprise factored into GNRC's Zacks #1 Rank (Strong Buy).

M&A Activity

On Oct 3 Generac announced the $80 million purchase of Magnum Products. Gererac said the move enhances their industrial product offerings and will bring in new product offerings. The company said EPS for Q4 should get a 3 or 4 cent boost and revenue should be up $25-$30 million.

The Chart

Raising the guidance couldn't have come at a better time for shareholders. The stock plunged in late September, but has since bounced back and is now at 52-week highs.

Even though shares have popped, you can still get in at decent valuations. The forward P/E is just under 12 times and the PEG ratio is at 0.9.