AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 05/11/2026
Moat—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Pricing power—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Predictability74
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 12.50
- Positive FCF years (%)
- 80.00
- FCF margin volatility (pp)
- 4.81
- observedAnnualPeriods
- 5.00
Financial strength51
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 43.26
- netDebtEbitGrade
- 31.42
- interestCoverageGrade
- 28.10
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 4.97
- Net debt / operating income (x)
- 3.43
- Interest coverage (x)
- 4.09
- Current ratio (x)
- 2.03
Capital allocation86
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 11.15
- 3-year average dilution (%)
- -2.49
- 3-year average SBC / revenue (%)
- 1.07
- cashConversionGrade
- 100.00
Management—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Evidence
Since then, we have scaled our sales & marketing capabilities and systems, while also building the Generac brand into one of the leading names in backup power in the US.
2025 Form 10-K, filed 2026-02-18; Business—Company History, brand and marketing development · Filed 18/02/2026
Generac’s power products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers, and equipment rental companies, as well as sold direct to certain end user customers.
June 2026 Form 10-Q, filed 2026-08-04; business description, distribution channels · Filed 04/08/2026
In addition, we increased our backlog for both hyperscale and non-hyperscale customers as we have received approximately $1 billion in additional orders from both new and existing customers since our prior update.
Second-quarter 2026 results exhibit, filed 2026-07-29; CEO statement, additional orders from new and existing data-center customers · Filed 29/07/2026
Some of our competitors have established brands and are larger in size or are divisions of large, diversified companies which have substantially greater financial resources than we do.
2025 Form 10-K, filed 2026-02-18; competition risk, competitors' brands and financial resources · Filed 18/02/2026
Despite our efforts, these tariff actions and resulting price increases have created inflationary pressures for consumers, negatively impacting demand and margins for certain of our products.
June 2026 Form 10-Q, filed 2026-08-04; MD&A—tariffs, realized effects on demand and margins · Filed 04/08/2026
our dependence on a small number of contract manufacturers and component suppliers, including single-source suppliers;
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changes and volatility with respect to the trade policies of various countries, which may result in new or increased tariffs, trade restrictions, or other unfavorable trade actions;
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our ability to protect our intellectual property rights or successfully defend against third party infringement claims;
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changes in durable goods spending by consumers and businesses or other global macroeconomic conditions, impacting demand for our products;
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changes in governmental policies, particularly with respect to tax incentives, tax credits, or grant programs, which could: (i) affect the demand for certain of our products; or (ii) result in a withdrawal or reduction of grants previously awarded to the Company;
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increase in product and other liability claims, warranty costs, recalls, or other claims;
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significant legal proceedings, claims, fines, penalties, tax assessments, lawsuits or government investigations;
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our ability to consummate our share repurchase programs;
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our failure or inability to adapt to, or comply with, current or future changes in applicable laws, regulations, and product standards;
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our ability to develop and enhance products and gain customer acceptance, including our offerings that serve the data center and energy technology markets;
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uncertainty regarding the growth of the data center market;
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increase in contract risk related to terms with certain data center customers, including cancellation rights, delivery requirements, and potential liability exposure tied to our performance obligations or other claimed damages;
June 2026 Form 10-Q, filed 2026-08-04; forward-looking risk disclosures, including data-center cancellation and performance exposure · Filed 04/08/2026
We implemented multiple price increases to help mitigate the impact of these rising commodity costs, and the realization of these price increases in 2022 and 2023 helped to partially offset the higher commodity costs.
2023 Form 10-K, filed 2024-02-21; commodity risk, realization of price increases in 2022 and 2023 · Filed 21/02/2024
Home standby generator sales were approximately flat as higher pricing in the current year was offset by lower volumes due to a strong prior year period that included the benefit from a substantial 2024 hurricane season.
First-quarter 2026 results exhibit, filed 2026-04-29; Residential segment, home standby price and volume distinction · Filed 29/04/2026
Gross profit margin was 38.7% as compared to 39.5% in the prior-year first quarter.
March 2026 Form 10-Q, filed 2026-05-05; MD&A, first-quarter gross-margin comparison · Filed 05/05/2026
The decrease in gross margin was primarily driven by unfavorable sales mix.
March 2026 Form 10-Q, filed 2026-05-05; MD&A, unfavorable sales mix · Filed 05/05/2026
In addition, higher input costs, including the impact of tariffs and commodities, were more than offset by increased price realization.
March 2026 Form 10-Q, filed 2026-05-05; MD&A, realized pricing relative to input costs · Filed 05/05/2026
Gross profit margin was 44.5% as compared to 39.3% in the prior year second quarter.
June 2026 Form 10-Q, filed 2026-08-04; MD&A, second-quarter gross-margin comparison · Filed 04/08/2026
The increase was primarily driven by tariff refunds which contributed approximately 6% to gross margin growth during the quarter.
June 2026 Form 10-Q, filed 2026-08-04; MD&A, tariff-refund contribution to second-quarter gross margin · Filed 04/08/2026
Additionally, unfavorable sales mix and higher input costs were partially offset by favorable price realization.
June 2026 Form 10-Q, filed 2026-08-04; MD&A, second-quarter pricing, mix and input costs · Filed 04/08/2026
We have implemented price increases across many of our product offerings and are executing a number of supply chain initiatives to attempt to mitigate the impact of these tariffs on our profitability.
June 2026 Form 10-Q, filed 2026-08-04; MD&A—tariffs, implemented price increases · Filed 04/08/2026
Cash flow from operations was $121.2 million during the second quarter, as compared to $72.2 million in the prior year.
Second-quarter 2026 results exhibit, filed 2026-07-29; quarterly operating cash flow · Filed 29/07/2026
This strong increase in free cash flow during the quarter was primarily driven by higher operating earnings, including cash receipts from tariff refunds.
Second-quarter 2026 results exhibit, filed 2026-07-29; cash-generation explanation including tariff-refund receipts · Filed 29/07/2026
On April 1, 2026, the Company issued 247,321 shares of its common stock to the former owners of Enercon, as partial consideration for the acquisition of all of the outstanding shares of Enercon.
June 2026 Form 10-Q, filed 2026-08-04; equity issued as Enercon acquisition consideration · Filed 04/08/2026
In addition, pursuant to the terms of the acquisition agreement, the Company may in the future issue additional shares of its common stock to the former owners of Enercon as contingent deferred consideration for the acquisition.
June 2026 Form 10-Q, filed 2026-08-04; possible additional acquisition shares · Filed 04/08/2026
On July 1, 2025, we amended our Original Tranche A Term Loan Facility and Original Revolving Facility (Prior Amended Credit Agreement), extending the maturity of both to July 1, 2030, revising the Original Tranche A Term Loan Facility outstanding principal balance to $700 million (New Tranche A Term Loan Facility), reducing the Original Revolving Facility borrowing capacity to $1 billion (New Revolving Facility) (collectively the New Credit Agreements) and redefining the Term Benchmark (as defined in the Prior Amended Credit Agreement) to replace the Adjusted Term SOFR Rate (as defined in the Prior Amended Credit Agreement) with the Term SOFR Rate (as defined in the New Credit Agreements), resulting in an interest rate reduction of 0.10%.
June 2026 Form 10-Q, filed 2026-08-04; Liquidity, completed July 2025 credit-facility amendments · Filed 04/08/2026
Position/Level
Stock Ownership Requirements
Non-Employee Directors
5 times annual retainer
Chief Executive Officer
6 times annual base salary
Top Executives
3 times annual base salary
Executives are expected to build ownership value over time because of their performance and participation in the Company’s equity compensation programs.
2026 proxy, filed 2026-04-29; stock-ownership requirements and their salary or retainer denominators · Filed 29/04/2026
The Committee reviewed a market analysis of stock ownership guidelines and approved changes at the September 2025 meeting.
2026 proxy, filed 2026-04-29; September 2025 approval of ownership-guideline changes · Filed 29/04/2026
Specifically, it simplified the retention ratios to be 50% of after-tax shares received from compensatory equity awards; however, if an executive is not in compliance after 5 years, the retention ratio is 100% of after-tax shares.
2026 proxy, filed 2026-04-29; adopted after-tax share-retention ratios · Filed 29/04/2026
As of March 31, 2026, all NEOs have met their ownership requirements.
2026 proxy, filed 2026-04-29; NEO ownership compliance as of March 31, 2026 · Filed 29/04/2026
Clawback Policies
We have a clawback policy that requires all executive officers to return excess incentive-based compensation resulting from an applicable accounting restatement.
2026 proxy, filed 2026-04-29; accounting-restatement clawback policy · Filed 29/04/2026
Second Quarter Business Segment Results
Commercial & Industrial Segment
Commercial & Industrial segment total sales increased approximately 29% to $556.5 million from $430.6 million in the prior year quarter, including an approximate 6% net favorable impact to sales growth from the combination of acquisitions, divestitures, and foreign currency.
Second-quarter 2026 results exhibit, filed 2026-07-29; C&I sales growth and acquisition, divestiture and currency qualification · Filed 29/07/2026
Cash flow from operations was $119.3 million during the first quarter, as compared to $58.2 million in the prior year.
First-quarter 2026 results exhibit, filed 2026-04-29; quarterly operating cash flow · Filed 29/04/2026
This strong increase in free cash flow during the quarter was primarily driven by higher operating earnings and a lower use of cash for working capital as compared to the prior year.
First-quarter 2026 results exhibit, filed 2026-04-29; cash-generation explanation, earnings and working capital · Filed 29/04/2026
2025 operating expenses also include $142.3 million of legal provisions, settlements, patent related costs, and other costs related to certain legal matters.
2025 Form 10-K, filed 2026-02-18; MD&A, 2025 legal-related operating expenses · Filed 18/02/2026
Aaron Jagdfeld has served as a director of the Company since 2006 and is the Company’s Chairman of the Board, President, and Chief Executive Officer.
2026 proxy, filed 2026-04-29; combined chairman, president and CEO roles · Filed 29/04/2026
Bennett Morgan serves as the Board’s independent Lead Director.
2026 proxy, filed 2026-04-29; independent lead director · Filed 29/04/2026
The Audit Committee meets with our independent registered public accounting firm without management present on a regular basis.
2026 proxy, filed 2026-04-29; regular auditor meetings without management · Filed 29/04/2026
There were no equity compensation plans not approved by the security holders.
2026 proxy, filed 2026-04-29; shareholder approval coverage of equity compensation plans · Filed 29/04/2026
