GENERAC HOLDINGS INC (NYSE:GNRC) stands out as a stock that provides good value for the fundamentals it showcases.

GENERAC HOLDINGS INC (NYSE:GNRC) has caught the attention of our stock screener as a great value stock. GNRC excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Looking at the Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. GNRC scores a 7 out of 10:

• 85.57% of the companies in the same industry are more expensive than GNRC, based on the Price/Earnings ratio.
• Compared to an average S&P500 Price/Earnings ratio of 24.12, GNRC is valued a bit cheaper.
• 85.57% of the companies in the same industry are more expensive than GNRC, based on the Price/Forward Earnings ratio.
• Compared to an average S&P500 Price/Forward Earnings ratio of 20.42, GNRC is valued a bit cheaper.
• 85.57% of the companies in the same industry are more expensive than GNRC, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, GNRC is valued cheaper than 86.60% of the companies in the same industry.
• The excellent profitability rating of GNRC may justify a higher PE ratio.
• A more expensive valuation may be justified as GNRC's earnings are expected to grow with 12.17% in the coming years.

Assessing Profitability for GNRC

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, GNRC has achieved a 8:

• The Return On Assets of GNRC (6.83%) is better than 87.63% of its industry peers.
• Looking at the Return On Equity, with a value of 13.99%, GNRC belongs to the top of the industry, outperforming 86.60% of the companies in the same industry.
• GNRC has a better Return On Invested Capital (10.25%) than 87.63% of its industry peers.
• The last Return On Invested Capital (10.25%) for GNRC is above the 3 year average (8.99%), which is a sign of increasing profitability.
• GNRC has a better Profit Margin (7.95%) than 85.57% of its industry peers.
• GNRC has a Operating Margin of 12.73%. This is amongst the best in the industry. GNRC outperforms 84.54% of its industry peers.
• The Gross Margin of GNRC (39.58%) is better than 88.66% of its industry peers.

Analyzing Health Metrics

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. GNRC has achieved a 7 out of 10:

• GNRC has an Altman-Z score of 3.91. This indicates that GNRC is financially healthy and has little risk of bankruptcy at the moment.
• GNRC has a better Altman-Z score (3.91) than 79.38% of its industry peers.
• The Debt to FCF ratio of GNRC is 2.42, which is a good value as it means it would take GNRC, 2.42 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 2.42, GNRC is in the better half of the industry, outperforming 78.35% of the companies in the same industry.
• Even though the debt/equity ratio score it not favorable for GNRC, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• The current and quick ratio evaluation for GNRC is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Evaluating Growth: GNRC

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. GNRC boasts a 6 out of 10:

• GNRC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.10%, which is quite impressive.
• The Revenue has grown by 8.07% in the past year. This is quite good.
• The Revenue has been growing by 14.28% on average over the past years. This is quite good.
• GNRC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.43% yearly.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of GNRC contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.