A month has gone by since the last earnings report for Generac Holdings (GNRC Quick QuoteGNRC - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Generac Holdings due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Generac Holdings Inc. before we dive into how investors and analysts have reacted as of late.

Generac Q2 Earnings Beat Estimates

Generac reported second-quarter 2025 adjusted earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate of $1.33. Generac reported adjusted EPS of $1.35 in the prior-year quarter.

Net sales were $1.061 billion, up 6% compared with $998 million reported in the prior-year quarter. The figure also beat the consensus estimate of $1.024 billion. The increases in both Residential product and C&I product sales acted as catalysts. 

Management also revised its expectations for 2025 owing to higher visibility, second-quarter outperformance and lower-than-expected price increases in the second half, mainly stemming from lower tariff assumptions.  

For 2025, management now expects revenues to increase 2-5% compared with the 0-7% rise guided earlier. Net income margin (before deducting for non-controlling interests) is now expected to be in the range of 7.5-8.5% compared with the 6.5-8.5% guided earlier. Adjusted EBITDA margin is estimated to be between 18% and 19% (previous projection being 17-19%). Due to the enactment of the One Big Beautiful Bill Act on federal income tax payments, Generac now expects free cash flow conversion from adjusted net income to be 90% to 100% compared with the previous guided range of 70% to 90%. 

Management expects Generac’s entry in the data-center market to be a lucrative business opportunity in the long term amid accelerating investment in data centers and the proliferation of artificial intelligence. In the second quarter, driven by a strong initial reception, the company has developed a significant global pipeline of opportunities and is now building a robust backlog for its new high-output diesel generator product.

Segments in Detail

Segment-wise, domestic revenues rose 7% year over year to $884.5 million. Results were supported by acquisitions, which contributed 1% of the increase. Core sales were driven by higher demand for residential energy technology solutions, portable generators and C&I products sales to industrial distributors and national telecom customers, partly offset by ongoing weakness in C&I product shipments to national rental accounts.

International revenues surged 7% year over year to $197.2 million, which includes a 1% favorable impact from foreign currency fluctuations. Core revenue growth was mainly due to higher inter-segment sales and strength in C&I product shipments in Europe. Weaker shipments in other regions acted as a headwind. 

Product-wise, revenues from Residential were up 7% year over year to $574 million. C&I revenues totaled $362 million, up 5% year over year. Revenues from the Other product class totaled $124.8 million, up 7.9% year over year.

The Zacks Consensus Estimate for Residential and C&I products’ second-quarter revenues was pegged at $557 million and $343 million, respectively.

Margin Performance

Gross profit was $416.8 million, up from $375.6 million in the prior-year quarter, with respective margins of 39.3% and 37.6%. Despite an unfavorable sales mix, gross profit margin performance benefited from a favorable pricing mix and lower input expenses.

Total operating expenses were $305 million, up 12% year over year, caused by higher variable costs due to higher shipment volumes, increased employee costs and ongoing operating expenses related to recent acquisitions. 

Operating income was $111.8 million, up 8.3% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $188 million compared with $165 million a year ago.

Cash Flow & Liquidity

In the second quarter, the company generated $72 million of net cash from operating activities. Free cash flow totaled $14 million.

As of June 30, 2025, cash and cash equivalents were $223.5 million, with nearly $1.29 billion of long-term borrowings and finance-lease obligations.

In the reported quarter, the company repurchased shares worth $50 million. Shares worth $200 million are left under its buyback authorization as of June 30, 2025.  

In February 2024, Generac approved a new share buyback authorization that allows for a repurchase of up to $500 million in the next 24 months. It replaced the remaining balance on the earlier program.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Generac Holdings has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Generac Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Generac Holdings belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Dover Corporation (DOV Quick QuoteDOV - Free Report) , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Dover reported revenues of $2.05 billion in the last reported quarter, representing a year-over-year change of -5.9%. EPS of $2.44 for the same period compares with $2.36 a year ago.

Dover is expected to post earnings of $2.51 per share for the current quarter, representing a year-over-year change of +10.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Dover. Also, the stock has a VGM Score of F.