GNRC Generac Holding Inc

Generac Holdings, Inc. (GNRC) has been surging for the last three months, recently hitting a new all-time high after almost doubling since late September. With another strong quarter in hand and a bullish growth projection, this Zacks #1 Rank stock is an industrial take on momentum.

Company Description

Generac Holdings, Inc. designs, manufactures and sells backup power generation products for residential, light-commercial and industrial markets in the United States. The company was founded in 1959 and has a market cap of $1.1 billion.

Generac might not seem like the most glamorous company in the world, but when you take a look at its share price, you might think otherwise. That movement has been driven by impressive sales and earnings growth, last on display in early November with strong Q3 results that came in ahead of expectations.

Third-Quarter

Revenue for the period was up 49% from last year to $239 million. Earnings also came in strong at 75 cents, 19% ahead of the Zacks Consensus Estimate.

The great quarter was driven by gains in the company's Residential segment, where sales jumped 61% from last year. But commercial and industrial sales were also strong, up 27%.

Financial Profile

Generac has used its recent earnings momentum to strengthen its financial profile, with cash and short-term investments up $11 million from last year to $139 million while total debt fell $98 million to $633 million.

Estimates

We've seen some real nice movement in estimates over the last few months, with the current year up 16% to $2.01. The next-year estimate is up 17% in the same time to $2.30, a bullish 14% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks solid, with its PEG ratio of 1 directly in line with the benchmark for value.

12-Month Chart

On the chart, shares have been rallying for the last three months, recently hitting a new all-time high on the good quarter. Look for support from the trend line on any weakness. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.
 
GENERAC HOLDING (GNRC): Free Stock Analysis Report
 
To read this article on Zacks.com click here.