What Happened?
Shares of power generation products company Generac (NYSE: GNRC) jumped 14.7% in the afternoon session after 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.
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What Is The Market Telling Us
Generac’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Generac and indicate this news significantly impacted the market’s perception of the business.
Generac is up 12.1% since the beginning of the year, but at $176.07 per share, it is still trading 9.8% below its 52-week high of $195.11 from November 2024. Investors who bought $1,000 worth of Generac’s shares 5 years ago would now be looking at an investment worth $1,191.
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