Why Generac Stock Powered Higher This Week
Generac Holdings (NYSE: GNRC) stock jumped this week after reporting quarterly earnings and boosting its full-year sales forecast. Shares were about 17% above last week's close as of Friday at noon, according to data provided by S&P Global Market Intelligence .
A sluggish housing market isn't slowing Generac's growth. That's because the company is now seeing strength from the expanding data center construction market.
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Another data center solution
Generac's commercial and industrial (C&I) segment reported a 28% sales increase in Q1, helping to drive overall net sales up 12%. Data center operators are looking for off-grid power generation and backup power solutions. Generac offers both.
The company offers commercial battery energy storage systems and diesel generators to provide uninterrupted power to the exploding data center market. Investors have noticed, and the stock is about 90% higher year to date after this week's surge.
It may not be too late for investors to jump in, though. Management now sees sales growing in the mid-to-high teens percent range this year, a slight boost from prior guidance. Much of that is thanks to the C&I segment, but even residential sales could increase 10% year over year, according to the company.
A strengthening housing market would only help that residential segment. Generac's business is humming right now, and it may not be too late for investors to get on board.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
Why Generac Stock Powered Higher This Week was originally published by The Motley Fool
