News about Generac

Generac's third-quarter net sales rose 16% year over year to a record $1.29 billion, while adjusted EBITDA increased 33% to $256 million, driven by data-center demand in its commercial and industrial business and a recovery in residential generator sales. A long-term Amazon agreement includes expected deliveries of $2.4 billion across 2027 and 2028, helping drive the data-center backlog to approximately $4.5 billion. Management expects 2027 data-center revenue to well exceed $2 billion and raised its adjusted EBITDA margin outlook to 20.5%–21%. Generac is expanding large-megawatt generator capacity, targeting roughly $4 billion in annual data-center-related capacity by the second half of 2027.

Generac Holdings (GNRC) shares were priced at US$189.23, and the stock has returned about 130.1% over the past 3 years. The article questions whether that price is supported by projected cash flows, especially after a long-term backup power agreement with Amazon with deliveries planned for 2027 and 2028. Using a two-stage free cash flow to equity DCF model, with latest free cash flow of about $386.3m and projections growing toward 2030, the article says intrinsic value is substantially above the current price, while the headline cites a 36% undervaluation. The stock trades at a 43.3x P/E.

Generac is scheduled to report third-quarter 2026 results on Oct. 28. The Zacks Consensus Estimate calls for earnings of $2.38 per share, down 2 cents over the past 60 days, and revenue of $1.31 billion, up 17.9% year over year. Generac beat estimates in two of the last four quarters and missed in two. Growth is driven by the Commercial & Industrial segment, where the data center backlog reached $1.6 billion as of July 2026 and management raised its 2026 data center revenue expectation to roughly $450 million. A long-term supply deal with Amazon worth $2.4 billion, with initial deliveries across 2027 and 2028, adds visibility to that business. The residential growth outlook for 2026 was lowered to high single digits from roughly 10%, citing low outage activity, affordability concerns and a small divestiture.