Abstract
Generac Holdings will report Q4 2025 results on February 11, 2026 Pre-Market; this preview compiles last quarter’s results, current-quarter projections, and sell-side sentiment to frame expectations for revenue, margins, and adjusted EPS.
Market Forecast
- The market’s current consensus for the current quarter points to revenue of $1.16 billion, adjusted EPS of $1.77, and EBIT of $134.76 million, implying a year-over-year revenue decline of 6.53% and an EPS decline of 29.16%; margins are expected to remain pressured. The company’s guidance framework and recent results suggest gross margin normalization near the high-30% range and net profit margin constrained by operating deleverage; consensus embeds a cautious stance on profitability.
- The core business is expected to be supported by residential standby generator demand stabilization, while commercial and industrial markets remain mixed; management’s focus remains on channel inventory and pricing discipline. The most promising segment is residential products at $0.63 billion last quarter, which remains the largest revenue contributor despite a softer housing and remodeling backdrop; recovery pace is expected to be gradual with channel normalization.
Last Quarter Review
- In the previous quarter, Generac reported revenue of $1.11 billion, a gross profit margin of 38.31%, GAAP net profit attributable to shareholders of $66.16 million with a net profit margin of 5.94%, and adjusted EPS of $1.83; year-over-year, revenue decreased by 5.05% and adjusted EPS decreased by 18.67%, indicating a tougher demand and margin environment.
- A notable highlight was sustained gross margin resilience at 38.31%, supported by improved mix and pricing discipline despite lower volumes. Main business results showed residential products revenue of $626.71 million, commercial and industrial products of $358.27 million, and other of $129.37 million; the residential category maintained its leading contribution as channel inventory worked lower.
Current Quarter Outlook
Residential Products
Residential standby generators remain the anchor. Channel inventory metrics suggest ongoing normalization, which should reduce discounting intensity and support price realization. However, new-home activity and remodel demand act as headwinds to unit growth, while promotional cadence and competitive pricing temper near-term ASP expansion. Weather-driven demand variability, especially limited major outage events late in the year, also weighs on replacement cycles. Against this backdrop, we expect revenue to contract year over year but to stabilize sequentially as backlog aligns with normalized sell-through. Margin performance within the residential segment is likely to benefit from easing freight and input costs, with mix shifting toward higher-capacity home standby products, partly offset by fixed-cost under-absorption due to lower volumes. Execution on lead generation platforms and dealer network productivity remains pivotal for recapturing growth as the macro environment improves.
Commercial and Industrial Products
Commercial and industrial demand shows a mixed picture. Data center and critical infrastructure projects support medium-term opportunities, yet broader non-residential construction has slowed, extending sales cycles and pushing some orders to later periods. Project timing introduces volatility to quarterly revenue recognition. We see incremental pressure on margins due to competitive bidding and a higher share of project-based solutions, which typically carry lower margin than residential standby. Supplier lead time normalization helps reduce expediting and logistics costs, but pricing power is limited in select verticals. For the current quarter, we expect modest year-over-year declines with clearer recovery signals likely tied to improved order intake in the first half of 2026. The business’s resilience will hinge on backlog conversion, service attach rates, and disciplined project selection to preserve profitability.
Key Stock Price Drivers This Quarter
Three variables dominate the near-term stock reaction. First, revenue trajectory versus consensus at $1.16 billion: even a small beat would signal that channel destocking has largely run its course, while a miss would reinforce demand softness and weigh on valuation. Second, gross margin versus the recent 38.31% print: investors will scrutinize whether mix and cost tailwinds can offset scale deleverage; prints below the high-30% level would likely spark estimate cuts. Third, adjusted EPS versus the $1.77 bar: given higher operating expenses from sales execution and innovation initiatives, operating leverage sensitivity remains elevated. Guidance on 2026 seasonality and early orders for spring-summer storm season could also influence multiple expansion or compression.
Analyst Opinions
The majority of recent institutional commentary leans cautious, with a higher share of neutral-to-underweight tones than outright bullish calls. Analysts highlight soft year-over-year comparisons for revenue and EPS, lingering channel normalization in residential products, and a less robust non-residential backdrop that constrains commercial and industrial growth. Several well-regarded sell-side teams emphasize that while gross margin has improved from prior troughs, operating leverage remains constrained by subdued volumes, raising the risk of further EPS pressure if revenue slips below plan. A prevailing view is that the setup requires clear evidence of demand inflection and backlog re-acceleration to turn more constructive, keeping expectations anchored around the current consensus for a mid-single-digit revenue decline and an adjusted EPS step down year over year.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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