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Generac Holdings (GNRC) Could Be 38% Undervalued As Data Center Demand Lifts Interest

Simply Wall St · 2d ago

Generac Holdings (GNRC) has drawn fresh attention after a sharp pullback, with the stock down about 20% over the past month and roughly 35% over the past 3 months.

At a share price of US$175.03, Generac Holdings has swung from a strong year-to-date share price return of 24.05% to a weaker recent patch, with the 30 day share price return down 20.19% and the 90 day share price return down 34.74%, hinting that earlier optimism is fading as investors reassess growth prospects and risks. Over a longer lens, the picture is mixed, with a 1 year total shareholder return down 4.67%, a 3 year total shareholder return of 59.23%, and a 5 year total shareholder return down 58.84%.

Look beyond Generac Holdings and identify other power and infrastructure companies that may be positioned for a potential rebound with our curated list of 38 power grid technology and infrastructure stocks.

After that kind of whiplash in Generac Holdings, the real question now is whether most of the easy gains already happened on the way up, or if the recent slide has reset expectations enough to leave meaningful upside still on the table.

Most Popular Narrative: 38% Undervalued

On the most followed narrative, Generac Holdings screens as undervalued, with a fair value estimate of about $283.88 against the recent $175.03 close. This puts the recent pullback against a backdrop of growth expectations that still assume meaningful expansion in earnings and cash flows over time.

Accelerating demand for backup power solutions in data centers driven by AI adoption and global digitalization has resulted in a structural supply deficit for large commercial generators. Generac's rapid entry and >$150 million backlog position it to capture significant revenue growth and operating leverage over the next several years, with further potential upside as the company expands capacity to address 2027+ demand.

See why 24 investors see Generac Holdings as 38% undervalued.

Result: Fair Value of $283.88 (UNDERVALUED)

Still, the bullish Generac Holdings narrative leans heavily on data center contracts delivering as planned and on cleaner energy operations stopping their drag on overall profitability.

Find out about the key risks to this Generac Holdings narrative.

Another View On Generac Holdings Valuation

Multiples tell a different story. Generac Holdings trades on a P/E of about 40x, while the US Electrical industry sits near 32.4x and close peers around 32.2x. The fair ratio sits lower again at 35.4x. That richer tag suggests valuation risk if expectations soften from here.

See what the numbers say about this price — find out in our valuation breakdown.

NYSE:GNRC P/E Ratio as at Sep 2026
NYSE:GNRC P/E Ratio as at Sep 2026

Next Steps

If this mix of caution and optimism around Generac Holdings leaves you on the fence, move quickly from reading to checking the numbers yourself. To weigh whether the positives justify the risks in your own mind, start by reviewing the 3 key rewards.

Looking for more investment ideas beyond Generac Holdings?

Do not stop your research with Generac Holdings alone. Broader idea generation can help you stress test your thesis, compare quality, and avoid missing opportunities sitting in plain sight.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.