Factors to Note Ahead of Generac's (GNRC) Q3 Earnings Release
Generac Holdings Inc GNRC will report third-quarter 2023 results on Nov 1.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.04 billion, indicating a year-over-year decrease of 4.6%. The consensus estimate for earnings is pegged at $1.51 per share, suggesting a 13.7% dip year over year.
GNRC beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average earnings surprise of 6.8%. In the past year, shares of the company have lost 29.1% compared with the sub-industry’s decline of 55.2%
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Key Factors
Generac’s performance is likely to have been cushioned by strength in the Commercial & Industrial (C&I) products segment’s sales. The C&I business segment is likely to have been aided by increasing spend on telecom infrastructure and rising power outages. The Zacks Consensus Estimate for C&I products' revenues is pegged at $342 million, implying a 10% gain year over year.
The company’s International C&I business segment is likely to gain from rising global demand for backup power and mobile products. Shipments for domestic C&I products are likely to have benefited from momentum across all channels, which also include national rental equipment, industrial distributors, telecom and other direct customers. Increasing shipments of natural gas generators, which are used in applications beyond traditional emergency standby projects, also bode well.
Generac Holdings Inc. Price and EPS Surprise
Generac Holdings Inc. price-eps-surprise | Generac Holdings Inc. Quote
However, Generac’s performance is likely to have been affected by demand softness in Residential products owing to elevated field inventory levels for home standby generators. This is likely to have negatively impacted orders and shipments. Also, a decline in shipments of clean energy products is likely to act as a headwind. The Zacks Consensus Estimate for Residential products' revenues is pegged at $574 million, suggesting a 13.6% tumble year over year.
GNRC’s margin performance is likely to have been affected by rising expenses owing to an increase in personnel hire as well as research and development costs. Weakness in PWRcell energy storage systems is a major concern.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Generac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Generac has an Earnings ESP of -0.33% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Itron ITRI has an Earnings ESP of +23.18% and currently flaunts a Zacks Rank of 1. ITRI is set to announce quarterly figures on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ITRI’s to-be-reported quarter’s earnings and revenues is pegged at 51 cents per share and $540.8 million, respectively. Shares of ITRI have gained 17% in the past year.
CDW Corporation CDW has an Earnings ESP of +0.17% and presently carries a Zacks Rank #3. CDW is slated to release quarterly numbers on Nov 1.
The Zacks Consensus Estimate for CDW’s to-be-reported quarter’s earnings and revenues is pegged at $2.59 per share and $5.82 billion, respectively. Shares of CDW have increased 15.1% in the past year.
GoDaddy Inc GDDY has an Earnings ESP of +8.11% and currently sports a Zacks Rank #1. GDDY is scheduled to report quarterly earnings on Nov 2.
The Zacks Consensus Estimate for GDDY’s to-be-reported quarter’s earnings and revenues is pegged at 71 cents per share and $1.06 billion, respectively. Shares of GDDY have plunged 10.9% in the past year.
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