Company Reports

We attended the RE+ conference and trade show in Anaheim, California. The conference and exhibit hall provided an opportunity to meet with companies as well as see latest product unveilings. We highlight our key takeaways below.

We are maintaining our $130 fair value estimate for narrow-moat Generac following second-quarter results. We view shares as slightly overvalued.

Hurricane Beryl has roiled the country this week, causing widespread power outages in the Houston, Texas area. We believe the magnitude and duration of the event should present an incremental revenue opportunity for Generac. As such, we are increasing our 2024 and 2025 revenue estimates by approximately 1%. We raise our fair value estimate to $130 from $126 and view shares as fairly valued.

Generac is in the midst of a transition to an energy technology solutions company.

We are raising our fair value estimate for narrow-moat Generac to $126 from $117 following recent power outage activity and after revisiting our long-term modeling assumptions. The bulk of the valuation uplift is from a slightly higher long-term earnings growth assumption in our DCF model. We view shares as slightly overvalued.

Generac is in the midst of a transition to an energy technology solutions company.

We are maintaining our $117 per share fair value estimate for narrow-moat Generac following its first-quarter earnings. We view shares as fairly valued.

Generac is in the midst of a transition to an energy technology solutions company.

Generac shares opened 8% lower but were little changed at the time of writing following its fourth-quarter earnings and 2024 guidance. We plan to update our model in the coming days, potentially affecting our $110 fair value estimate by up to 10% in either direction. We view shares as fairly valued.

We maintain our $110 fair value estimate for narrow-moat Generac after reviewing financials for its closest competitor, Kohler Energy. We view shares as fairly valued.

Clean energy stocks have had a roller-coaster 18 months. Optimism following the passage of the Inflation Reduction Act in August 2022 gave way to rising interest rates in 2023. We highlight three key themes for investors to focus on in 2024: interest rates, U.S. policy, and profitability.

We maintain our $110 fair value estimate for narrow-moat Generac following the company's third-quarter results. Shares jumped following results (up 14% at the time of writing), which we view as attributable to the company reiterating 2023 guidance despite fears of a guidance cut. We view shares as slightly undervalued.

We maintain our $110 fair value estimate for Generac after attending its analyst day in Wisconsin. We view shares as fairly valued.

We lower our fair value estimate for narrow-moat Generac to $110 per share from $124 following the company's second-quarter results. The drivers of our reduced valuation are a reduction to our revenue expectations and lower operating margins. We view shares as fairly valued following the share price drop.

Generac is in the midst of a transition to an energy technology solution company.

We maintain our $124 fair value estimate for narrow-moat Generac following the company's first-quarter results. Shares rose sharply (up 15% at the time of writing) on results, which we equate to low expectations. We make only minor changes to our model and view shares as fairly valued following the jump.

We raise our Generac fair value estimate to $124 per share from $120 following the company's fourth-quarter results and 2023 guidance. The main driver of our fair value estimate increase is a higher home standby sales forecast, partially offset by higher operating expenses. We view upside as limited for shares going forward following their recent rebound.

Generac is in the midst of a transition to an energy technology solution company.

We are adjusting fair value estimates for some of our rooftop solar coverage after refreshing our long-term industry outlook. The fair value estimate changes range from a reduction of 26% for SunPower to no change for Generac and SolarEdge. We reduce Sunrun's and Enphase's fair value estimates by 16% and 5%, respectively.

Generac shares had a forgettable 2022, ending the year down 71%, far outpacing declines seen in the broad equity indexes. While investor expectations are clearly low, we see this balanced by fundamental headwinds. We maintain our $120 fair value estimate and find shares fairly valued. Our narrow moat and negative moat trend ratings are also unchanged.