NEW YORK (TheStreet) -- Generac Holdings (GNRC) shares are down -4.4% to $56.32 on Thursday following the release of the company's first quarter 2014 earnings report.
Net sales for the quarter dropped -14% from the year ago period to $342 million, missing analyst consensus estimates of $355.58 million.
Net income during the period was $50.7 million, or 72 cents per diluted share, missing analysts estimates by 2 cents.
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TheStreet Ratings team rates GENERAC HOLDINGS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAC HOLDINGS INC (GNRC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GNRC's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 10.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 68.29% and other important driving factors, this stock has surged by 68.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- GENERAC HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, GENERAC HOLDINGS INC increased its bottom line by earning $2.49 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($3.78 versus $2.49).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 71.5% when compared to the same quarter one year prior, rising from $28.29 million to $48.52 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, GENERAC HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GNRC Ratings Report