Factors to Note Ahead of Generac's (GNRC) Q4 Earnings Release
Generac Holdings Inc GNRC will report fourth-quarter 2022 results on Feb 15.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.07 billion, indicating a year-over-year increase of 0.2%. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, down 32.7% year over year.
The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 9.1%. In the past year, shares of the company have lost 56.9%, compared with the sub- industry’s decline of 62.5%.
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Key Factors
Generac’s performance is likely to have benefited from continued momentum in the Residential Products and Commercial & Industrial (C&I) products segments’ sales. Synergies from acquisitions are likely to have acted as tailwinds.
The fast developing solar, storage & monitoring markets bode well along with increasing demand for natural gas generators. An upbeat in demand for connected devices like smart thermostats and PWRcell energy storage system, is likely to have favored the top-line performance in the to-be-reported quarter. C&I sales are likely to have gained from rising demand in the mobile and telecom channels.
Generac Holdings Inc. Price and EPS Surprise
Generac Holdings Inc. price-eps-surprise | Generac Holdings Inc. Quote
However, Generac’s performance is being affected due to installation-capacity constraints in the company’s distribution network. This led to greater field-inventory levels and lower home-standby generator orders from the company’s channel partners.
The shipments of clean energy products were impacted due to a leading customer who has stopped its operations and filed for bankruptcy protection in the last reported quarter. As a result, the company has lowered its revenue growth guidance for 2022 from 36-40% to 22-24%. This includes a net impact between 5% and 7% from acquisitions and foreign currency changes.
The net income margin (before deducting for non-controlling interests) is expected to be 9-10%. The adjusted EBITDA margin is estimated in the range of 18-19%.
Uncertainty prevailing over global economic conditions, protracted supply-chain and logistics troubles and increasing operating costs remain other major concerns.
What Our Model Says?
Our proven model does not 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 0.00% and a Zacks Rank #4 (Sell). 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 time around.
PBF Energy PBF has an Earnings ESP of +1.88% and presently carries a Zacks Rank #2. The company is slated to release quarterly numbers on Feb 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PBF’s to-be-reported quarter’s earnings and revenues are pegged at $4.95 per share and $9.6 billion, respectively. Shares of the company have lost 1.8% in the past year.
Tripadvisor TRIP has an Earnings ESP of +112.9% and presently carries a Zacks Rank #3. The company is slated to release quarterly numbers on Feb 14.
The Zacks Consensus Estimate for TRIP’s to-be-reported quarter’s earnings and revenues are pegged at 5 cents per share and $343.8 million, respectively. Shares of the company have lost 15.3% in the past year.
Fastly FSLY has an Earnings ESP of +3.03% and currently carries a Zacks Rank #2. The company is slated to release quarterly numbers on Feb 15.
The Zacks Consensus Estimate are pegged at loss of 12 cents per share and $114.4 million for revenues, respectively. Shares of FSLY have gained 65% in the past year.
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TripAdvisor, Inc. (TRIP) : Free Stock Analysis Report
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Generac Holdings Inc. (GNRC) : Free Stock Analysis Report
Fastly, Inc. (FSLY) : Free Stock Analysis Report
