GNRC – Market expectations are less bullish than warranted given management’s confidence about their M&A, Northern California, and PowerPlay CE

• Generac Holdings Inc. (GNRC:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 28.2x Uniform P/E. However, even at these levels, the market only has modest expectations for the firm, while management is confident about their M&A pipeline, Northern California, and PowerPlay CE product
  
  

• Specifically, management is confident that their dealers now have the ability to consult homeowners in-home or remotely, and that their M&A pipeline towards the clean energy industry puts them in an enviable position. In addition, they are confident that their Energy Systems acquisition enables them to serve one of the largest power generation markets in the U.S. with Northern California. Furthermore, they are confident in their improved PowerPlay CE product, and in their gross debt leverage ratio at the end of Q2
  
  

• This, coupled with the firm’s fundamental tailwinds, dominant market position, and massive market opportunity, suggest market expectations are not bullish enough, and equity outperformance for GNRC is warranted