The 10-second takeaway
For the quarter ended June 30 (Q2), Generac Holdings beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share increased significantly.
Margins increased across the board.
Generac Holdings tallied revenue of $346.7 million. The nine analysts polled by S&P Capital IQ wanted to see a top line of $328.4 million on the same basis. GAAP reported sales were 45% higher than the prior-year quarter's $239.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.95. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.77 per share. Non-GAAP EPS of $0.95 for Q2 were 64% higher than the prior-year quarter's $0.58 per share. GAAP EPS of $0.40 for Q2 were 186% higher than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 37.8%, 120 basis points better than the prior-year quarter. Operating margin was 22.0%, 650 basis points better than the prior-year quarter. Net margin was 8.1%, 420 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $327.4 million. On the bottom line, the average EPS estimate is $0.79.
Next year's average estimate for revenue is $1.37 billion. The average EPS estimate is $3.47.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 70 members out of 77 rating the stock outperform, and seven members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 20 give Generac Holdings a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Generac Holdings is outperform, with an average price target of $41.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Generac Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.