A strong performer from today's afternoon trading session is Generac Holdlings, whose shares rose 4.5% to $122.3 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Generac Holdings Inc. designs, manufactures, and sells power generation equipment, energy storage systems, energy management devices and solutions, and other power products for the residential, light commercial, and industrial markets worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of None and an average price to book (P/B) ratio of None. In contrast, Generac Holdlings has a trailing 12 month P/E ratio of 48.3 and a P/B ratio of 3.18.
When we divide Generac Holdlings's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -15.25. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.