GNRC

Generac's fundamentals deteriorated sharply in FY2025 while the stock price did not. Revenue slipped 2.0% to $4.21B, but the damage was on the bottom line: operating income fell 46.1% to $289M, net income dropped 49.6% to $160M, and diluted EPS halved (down 50.1%) to $2.69. Return on equity collapsed to just 6.1% and net margin to 3.8% — a far cry from the $550M of net income the company earned in FY2021 on less revenue. Operating cash flow also fell 40.9% to $438M.

The forward picture is clouded by a specific regulatory headwind management flags directly: the One Big Beautiful Bill Act (OBBBA), enacted July 2025, 'accelerated the phase out of certain investment tax credits, resulting in a negative impact to the solar & storage market thereafter.' Generac's residential demand is already tied to the housing/investment cycle, consumer confidence and interest rates, and the loss of solar/storage subsidies removes a growth pillar the bull case had relied on. Add commodity exposure (steel, copper, aluminum) and tariff/geopolitical risk that management cites as material.