What Happened?

Shares of power generation products company Generac (NYSE: GNRC) jumped 3.1% in the afternoon session after it received positive sentiment from Wall Street analysts who held a consensus "Strong Buy" rating on the stock. 

A report covering 19 analysts showed a strong belief that the stock was likely to perform well in the near future. This group of analysts set an average price target of $192.05 for the company. This target forecasted a potential 37.52% increase in the stock's price over the following year, signaling strong confidence in the company's outlook. The collective rating indicated a belief that the stock could significantly outperform the broader market.

After the initial pop the shares cooled down to $140.56, up 3.1% from previous close.

Is now the time to buy Generac? Access our full analysis report here.

What Is The Market Telling Us

Generac’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock gained 14.7% on the news that the company reported second-quarter results that surpassed analyst expectations and raised its full-year profit margin guidance. 

The company posted revenue of $1.06 billion, a 6% increase from the prior year, driven by growth in both its residential and commercial & industrial segments. Adjusted earnings came in at $1.65 per share, handily beating analyst consensus. A key factor in the strong performance was an improved gross profit margin, which expanded to 39.3% from 37.6% a year ago. Management attributed this to favorable pricing and lower input costs. Following the strong quarter, Generac raised the low end of its full-year adjusted EBITDA margin forecast to a range of 18.0% to 19.0%, signaling confidence to investors. Adding to the positive sentiment, Guggenheim had also upgraded the stock to a "buy" rating just a day prior to the earnings release.

Investors who bought $1,000 worth of Generac’s shares 5 years ago would now be looking at an investment worth $625.91.

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