Backup power & energy technology, data center opportunity, AGI 9. | Analysis date: 2026-03-13
Generac is the leading manufacturer of backup power generation in North America. AGI score 9: data centers need backup power, and Generac has introduced large-megawatt diesel generators for the data center market. At $201/share ($11.8B market cap), trades at 75x trailing P/E but has significant data center TAM expansion opportunity. Founded in 1959.
Generac designs and manufactures power generation equipment, energy storage, and energy management solutions. Core markets: residential standby generators, commercial/industrial power, and now data center backup power. $4.2B revenue (FY2025). 9,400 employees. Recently launched large-megawatt diesel generators targeting the data center market. Also building energy storage and home energy management platform.
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|---|
| Revenue | $761M | $1.1B | $1.0B | $1.1B | $4.3B | $4.2B |
| Net Income | $347M | $557M | $409M | $217M | $317M | $161M |
| Operating Cash Flow | $487M | $411M | $59M | $522M | $741M | $438M |
| Capital Expenditures | $62M | $110M | $86M | $129M | $137M | $170M |
| Operating Income | $171M | $175M | $107M | $151M | $537M | $289M |
| Gross Profit | $300M | $363M | $343M | $389M | $1.7B | $1.6B |
| Balance Sheet (Latest FY) | Value |
|---|---|
| Total Assets | $5.6B |
| Cash & Equivalents | $341M |
| Property, Plant & Equipment | $814M |
| Goodwill | $1.5B |
| Intangible Assets | $675M |
| Long-Term Debt | $1.2B |
| Stockholders Equity | $2.6B |
| Tangible Book Value | $496M |
| Tangible Book / Share | $8.47 |
| Shares Outstanding | 58,523,642 |
| Year | Shares Outstanding | Change |
|---|---|---|
| FY2020 | 62,280,889 | - |
| FY2021 | 62,686,001 | +0.7% |
| FY2022 | 63,117,007 | +0.7% |
| FY2023 | 61,265,060 | -2.9% |
| FY2024 | 59,559,797 | -2.8% |
| FY2025 | 58,523,642 | -1.7% |
Data centers are the fastest-growing market for backup power. Every GW of new data center capacity needs backup generators. Generac's new large-megawatt diesel line directly addresses this $15B+ market. If Generac captures 15-20% share, that is $2-3B in additional revenue at higher margins than residential. Revenue could reach $8-10B by 2030.
Climate change drives more extreme weather events, increasing demand for home backup power. Generac is building a home energy ecosystem (solar + storage + generator + smart panel). Residential provides stable base while data center provides growth. Domestic manufacturing benefits from reshoring.
At 75x trailing P/E, Generac is priced for massive growth. FY2025 net income was only $161M, down from $557M in 2021. Earnings have actually declined. The stock price reflects a data center thesis that has not yet shown up in the numbers.
Data center backup power is dominated by Caterpillar, Cummins, and MTU (Rolls-Royce). Generac is the newcomer. Large enterprise buyers have existing relationships. Brand strength is in residential, not enterprise. $1.47B goodwill + $675M intangibles = $2.14B in soft assets.
| Current Price | $200.53 |
| Bull Case Price (by 2030-2035) | $800 |
| 10x Entry Price (Bull Case / 10) | $80 |
| Current Price vs 10x Entry | $200.53 ABOVE entry zone |
Rationale: Revenue to $10B (data center + residential), 15% net margins = $1.5B earnings at 30x = $45B = ~$750/share. Aggressive: $800. Entry for 10x: $80. Need data center thesis to fail + housing downturn.
GNRC at $200.53: Trading well above the 10x entry zone (would need a significant pullback for 10x potential).
AGI Score 9/10 — Strong AGI beneficiary.
Floor estimate: Tangible book value per share is $8.47. Current price is well above tangible book: downside protection comes from cash flows, not assets.
Data sources: SEC EDGAR XBRL, yfinance, 10-K filings. Analysis date: 2026-03-13.