While the broader market has struggled with the S&P 500 down 1.8% since October 2025, Generac has surged ahead as its stock price has climbed by 17.3% to $201.69 per share. This performance may have investors wondering how to approach the situation.

Is there a buying opportunity in Generac, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Is Generac Not Exciting?

We’re glad investors have benefited from the price increase, but we don't have much confidence in Generac. Here are three reasons why GNRC doesn't excite us and a stock we'd rather own.

1. Lackluster Revenue Growth

We at StockStory place the most emphasis on long-term growth, but within industrials, a stretched historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Generac’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.3% over the last two years was well below its five-year trend.

2. EPS Growth Has Stalled

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Generac’s flat EPS over the last five years was below its 11.1% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Generac’s ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

Final Judgment

Generac isn’t a terrible business, but it isn’t one of our picks. With its shares outperforming the market lately, the stock trades at 22.6× forward P/E (or $201.69 per share). Beauty is in the eye of the beholder, but our analysis shows the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere. We’d suggest looking at one of our top digital advertising picks.

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