Factors to Note Ahead of Generac's (GNRC) Q2 Earnings Release
Generac Holdings Inc GNRC will report second-quarter 2023 results on Aug 2.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $985 million, indicating a year-over-year decrease of 23.7%. The Zacks Consensus Estimate for earnings is pegged at $1.16 per share, down 61.2% year over year.
The company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 11.7%. In the past year, shares of the company have lost 43.4% compared with the sub-industry’s decline of 58.7%.
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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 company’s International 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.
The C&I business segment is likely to have been aided by increasing spend on telecom infrastructure, rising power outages and strengthening end-market activities in the home standby generators’ category. The Zacks Consensus Estimate for C&I products' revenues stands at $343 million, up 11% year over year.
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 continued softness of Residential products as home standby field inventory levels continue to normalize. This is likely to have negatively impacted orders and shipments. Also, decline in shipments of clean energy products is likely to act as a headwind. The Zacks Consensus Estimate for Residential products' reveneus stands at $546 million, down 39% year over year.
GNRC’s margin is likely to have been affected by rising expenses owing to laying the groundwork for the development of a home energy technology industry. Weakness in PWRcell energy storage systems is a major concern.
What Our Model Says
Our proven model predicts 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 +1.57% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other 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.
Yelp Inc YELP has an Earnings ESP of +5.63% and carries a Zacks Rank #2. YELP is slated to release second-quarter 2023 numbers on Aug 3.
The Zacks Consensus Estimate for YELP’s to-be-reported quarter’s earnings and revenues is pegged at 14 cents per share and $325.6 million, respectively. The stock has increased 43.9% in the past year.
Itron Inc ITRI has an Earnings ESP of +7.61% and currently sports a Zacks Rank #1. ITRI is scheduled to report second-quarter 2023 earnings on Aug 3. 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 31 cents per share and $518 million, respectively. The stock has surged 32.1% in the past year.
Cummins Inc CMI has an Earnings ESP of +0.92% and presently has a Zacks Rank #2. CMI is set to report second-quarter 2023 earnings on Aug 3.
The Zacks Consensus Estimate for CMI’s to-be-reported quarter’s earnings and revenues is pegged at $5.19 per share and $8.24 billion, respectively. The stock has gained 18.8% in the past year.
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Generac Holdings Inc. (GNRC) : Free Stock Analysis Report
