Is Generac Holdings, Inc. overvalued or undervalued?

As of 28 February 2025, the valuation grade for Generac Holdings, Inc. has moved from fair to attractive, indicating a positive shift in its financial outlook. The company is currently deemed undervalued, with a P/E ratio of 22, which is lower than the peer average of 25.57 for Hubbell, Inc. and significantly lower than Acuity Brands, Inc. at 31.53. Additionally, Generac's EV to EBITDA stands at 13.57, which is favorable compared to Hubbell's 17.03, and its PEG ratio of 0.33 suggests strong growth potential relative to its price.
In terms of profitability, Generac boasts a ROCE of 15.44% and an ROE of 15.77%, reflecting solid returns on capital and equity. While the stock has underperformed against the S&P 500 year-to-date, it has shown resilience with a recent weekly return of 5.71%, contrasting with the S&P 500's slight decline. Overall, these metrics support the conclusion that Generac Holdings, Inc. is undervalued in the current market context.