Trading On margin

Generac Stock Scraps. Generator Maker is missing the revenue estimates.

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Courtesy of Generac

Actions of

Generac Holdings

were down on Tuesday after the generator maker posted quarterly profits and sales slightly below Wall Street expectations due to supply chain issues.

Adjusted third-quarter earnings were $ 2.35 per share, down from $ 2.08 a year earlier, but slightly lower than analysts’ estimates of $ 2.37 per share. Third-quarter sales were $ 942.7 million, a missing consensus of $ 961.1 million.

The stock fell 3.12% to $ 490.04 on Tuesday. The shares had fallen nearly 10% before the market.

“As expected, supply chain and inflation factors impacted margins, albeit slightly more than expected; they’ve also blocked sales somewhat, ”Oppenheimer analysts said in a note.

Analysts are pricing the stock on Outperform with a price target of $ 500.

Generac (ticker: GNRC) maintained its outlook for net sales growth for the full year 2021 of around 47% to 50% from the previous year. The Adjusted EBITDA margin has been reduced to 23.5% from the previous range of 24.5% to 25.0%.

Gross margin in the quarter was 35.6% versus Oppenheimer’s estimate of 37.1%, “reflecting inflation, logistics and plant start-up costs, partially offset by early impacts recent price actions, ”Oppenheimer said.

“In addition to a well-established outlook for significant revenue growth in 2022, the GNRC sees the full impact of actions on pricing and cost initiatives leading to increased margins in 2022,” analysts added.

The home generator maker also said it was buying Toronto-based smart thermostat maker Ecobee for $ 770 million.

Generac also announced the expansion of its plant in Trenton, South Carolina. This move will increase the company’s distribution capacity in the Southeastern United States.

Write to Karishma Vanjani at [email protected]

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