Generac Holdings Inc. (GNRC) Stock Valuation — DCF Analysis
Industrial - Machinery · NYSE
Current Price
$262.36
Intrinsic Value
$297.25
+11.7% margin of safety
COMPETITIVE MOAT
↑AI Data Center Power Leader
Generac is positioned as a critical supplier for AI's immense power needs. Their large-scale generators are essential for the continuous operation of data centers.
↑Hyperscaler Partnerships
Securing global supply agreements with leading hyperscale data center operators creates sticky customer relationships. This indicates strong demand and trust in their solutions.
↑Product Innovation Recognition
Awards for their 3.25MW generator highlight technological leadership. This reinforces their ability to meet demanding, mission-critical power requirements.
INVESTMENT RISKS
↓Concentration Risk
Reliance on a few large hyperscaler contracts could expose Generac to significant revenue fluctuations if these relationships change. Diversification is key.
↓Technological Obsolescence
Rapid advancements in AI and data center technology could necessitate continuous, costly R&D to maintain competitive power solutions. New energy sources could emerge.
↓Supply Chain Vulnerabilities
Global supply agreements for complex machinery are susceptible to disruptions. Geopolitical events or material shortages could impact production and delivery.
Base case
GNRC base case valuation
A base case discounted cash flow model for GNRC estimates an intrinsic value of about $297.25 per share, against a current price of $262.36. The model assumes 20.0% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$297.25
Margin of safety
+11.7%
Expected annual return
+2.5%
Base case assumptions: 20.0% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the GNRC valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Generac Holdings Inc. respond.
Open DCF Calculator for GNRCCompany Overview
Generac Holdings Inc. specializes in the engineering, manufacturing, and global distribution of diverse power generation systems, energy storage solutions, and related electrical products. The company caters to residential users, light commercial enterprises, and industrial sectors worldwide. At its core, Generac produces vital components such as engines, alternators, batteries, advanced electronic controls, and robust steel enclosures. For homeowners, the company provides a range of automatic standby generators, from 7.5kW up to 150kW, including air-cooled models (7.5kW-26kW) and more powerful liquid-cooled units (22kW-150kW). Many of these residential systems are compatible with Mobile Link, a remote monitoring platform. Generac also offers portable generators, spanning outputs from 800W to 17.5kW, alongside an extensive catalog of outdoor power equipment like trimmers, mowers, log splitters, and pressure washers. Its commitment to sustainable energy is evident through its clean energy offerings, marketed under the PWRcell and PWRview brands. Serving commercial and industrial clients, Generac supplies essential equipment such as light towers, mobile power units, and portable energy storage systems. Its portfolio extends to include commercial mobile pumps, dust-suppression apparatus, and various control systems for gaseous-fueled engines. Light-commercial standby generators, rated from 22kW to 150kW, deliver critical three-phase power to small and mid-sized businesses. For heavy-duty applications, industrial generators with capabilities from 10kW to a formidable 3,250kW are deployed as emergency backup power for vital infrastructure across healthcare, telecommunications, data centers, commercial offices, retail, municipal services, and manufacturing facilities. Beyond direct product sales, the company supports its offerings by supplying aftermarket service parts and product accessories to its vast dealer network. Generac's distribution strategy is multi-faceted, leveraging independent residential and industrial dealers, major national and regional retailers, e-commerce platforms, specialized wholesalers (electrical, HVAC, solar), catalogs, equipment rental firms, and direct engagement with end-users. Founded in 1959, Generac Holdings Inc. is proudly headquartered in Waukesha, Wisconsin.
Financial Metrics — GNRC Stock Valuation Data
Revenue/Share (TTM)
$74.07
FCF/Share (TTM)
$5.66
ROIC (TTM)
5.8%
ROE (TTM)
7.2%
P/FCF
46.7x
EV/EBITDA
32.3x
FCF Yield
2.14%
Debt/Equity
0.49x
Based on trailing twelve-month data, GNRC shows a free cash flow per share of $5.66 and a ROIC of 5.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 46.7x and FCF yield of 2.14% are important context metrics when evaluating GNRC's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of GNRC?
Generac Holdings Inc. currently generates $5.66 in free cash flow per share. At the current price of $262.36, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is GNRC undervalued?
GNRC trades at a P/FCF ratio of 46.7x with a free cash flow yield of 2.14%. This elevated P/FCF suggests the market is pricing in significant future growth. However, whether GNRC is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value GNRC stock using DCF?
To perform a DCF valuation on Generac Holdings Inc.: (1) Start with the trailing free cash flow per share ($5.66) as the base, (2) project future FCF growth over 5-10 years based on Industrial - Machinery industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting GNRC's risk profile — with a debt-to-equity of 0.49x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to GNRC?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Generac Holdings Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Industrial - Machinery trends, then discounting those amounts to today's dollars. GNRC's ROIC of 5.8% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect GNRC stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For GNRC, with a debt-to-equity ratio of 0.49x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 32.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See GNRC PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value GNRC with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.