U.S. markets open in 5 hours 2 minutes

The Generac Holdings (NYSE:GNRC) Share Price Has Gained 168%, So Why Not Pay It Some Attention?

Simply Wall St

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. For instance the Generac Holdings Inc. (NYSE:GNRC) share price is 168% higher than it was three years ago. How nice for those who held the stock! But it's down 9.1% in the last week. It may be that the recent financial results disappointed, so check out the latest revenue and profit numbers on in our company report.'

View our latest analysis for Generac Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Generac Holdings was able to grow its EPS at 40% per year over three years, sending the share price higher. Notably, the 39% average annual share price gain matches up nicely with the EPS growth rate. That suggests that the market sentiment around the company hasn't changed much over that time. Quite to the contrary, the share price has arguably reflected the EPS growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

NYSE:GNRC Past and Future Earnings, February 28th 2020

We know that Generac Holdings has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that Generac Holdings shareholders have received a total shareholder return of 101% over one year. That gain is better than the annual TSR over five years, which is 17%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Generac Holdings better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Generac Holdings .

Of course Generac Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.