Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Generac Holdings Inc., current price multiples
| Generac Holdings Inc. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | $252.06 | ||||||||||||
| No. shares of common stock outstanding | 63,830,918 | ||||||||||||
| Growth rate (g) | 27.57% | ||||||||||||
| Earnings per share (EPS) | $8.62 | ||||||||||||
| Next year expected EPS | $11.00 | ||||||||||||
| Operating profit per share | $11.30 | ||||||||||||
| Sales per share | $58.55 | ||||||||||||
| Book value per share (BVPS) | $34.68 | ||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | 29.23 | 80.94 | 43.74 | 41.44 | 36.90 | 14.34 | 23.25 | 36.97 | 109.41 | 54.93 | |||
| Price to next year expected earnings | 22.91 | 15,797.04 | 33.11 | 37.97 | 36.27 | 12.55 | 16.99 | 36.23 | 108.80 | 51.40 | |||
| Price-earnings-growth (PEG) | 1.06 | — | 1.36 | 4.53 | 21.20 | 1.01 | 0.63 | 17.93 | 195.27 | 8.00 | |||
| Price to operating profit (P/OP) | 22.31 | 35.74 | 34.85 | 32.52 | 29.15 | 12.17 | 15.09 | 26.76 | 43.84 | 34.54 | |||
| Price to sales (P/S) | 4.31 | 1.71 | 6.07 | 6.17 | 7.59 | 1.81 | 1.55 | 2.81 | 3.99 | 3.19 | |||
| Price to book value (P/BV) | 7.27 | 28.05 | 18.23 | 8.72 | 17.20 | 4.88 | 17.36 | 3.81 | 9.11 | 8.39 | |||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Generac Holdings Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Valuation multiples between 2017 and 2021 exhibit a synchronized pattern of volatility, characterized by a period of compression in 2018 and a significant expansion that peaked in 2020. All analyzed ratios show a consistent trajectory, with a sharp increase in market premiums during the 2020 fiscal year followed by a partial correction in 2021.
- Profitability Multiples
- The Price to Earnings (P/E) ratio decreased from 18.07 in 2017 to 13.55 in 2018, before rising sharply to a peak of 59.72 in 2020. A subsequent decline to 32.73 was observed in 2021. This trend is mirrored by the Price to Operating Profit (P/OP) ratio, which moved from 11.47 in 2017 to 9.04 in 2018, spiked to 43.70 in 2020, and moderated to 24.98 by the end of 2021.
- Revenue and Asset Multiples
- The Price to Sales (P/S) ratio remained relatively stable between 2017 and 2018, moving from 1.72 to 1.60, before escalating to 8.42 in 2020 and retreating to 4.82 in 2021. Similarly, the Price to Book Value (P/BV) ratio declined from 5.15 in 2017 to 4.25 in 2018, surged to a peak of 15.06 in 2020, and decreased to 8.14 in 2021.
The simultaneous peak across all four valuation metrics in 2020 indicates a period where the market price grew at a rate substantially exceeding the growth of earnings, operating profits, sales, and book value. The correction observed in 2021 suggests a normalization of these multiples, although they remain elevated compared to the 2017-2018 baseline.
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Price to Earnings (P/E)
Generac Holdings Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 63,783,651 | 62,861,442 | 62,567,525 | 62,129,621 | 62,325,716 | |
| Selected Financial Data (US$) | ||||||
| Net income attributable to Generac Holdings Inc. (in thousands) | 550,494) | 350,576) | 252,007) | 238,257) | 159,386) | |
| Earnings per share (EPS)2 | 8.63 | 5.58 | 4.03 | 3.83 | 2.56 | |
| Share price1, 3 | 282.47 | 333.04 | 107.31 | 51.97 | 46.20 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 32.73 | 59.72 | 26.64 | 13.55 | 18.07 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 16.82 | — | — | — | — | |
| Eaton Corp. plc | 27.77 | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | 23.14 | — | — | — | — | |
| Lockheed Martin Corp. | 16.70 | — | — | — | — | |
| RTX Corp. | 36.79 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Capital Goods | 57.31 | — | — | — | — | |
| P/E Ratio, Industry | ||||||
| Industrials | 35.59 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income attributable to Generac Holdings Inc. ÷ No. shares of common stock outstanding
= 550,494,000 ÷ 63,783,651 = 8.63
3 Closing price as at the filing date of Generac Holdings Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 282.47 ÷ 8.63 = 32.73
5 Click competitor name to see calculations.
Between 2017 and 2021, a significant divergence is observed between the steady growth of earnings per share and the more volatile trajectory of the share price, resulting in substantial fluctuations in the price-to-earnings (P/E) multiple.
- Share Price Dynamics
- The share price exhibited a period of exponential growth, rising from 46.20 USD in 2017 to a peak of 333.04 USD in 2020. This represents a dramatic increase in market valuation over a four-year span, followed by a moderate correction to 282.47 USD by the end of 2021.
- Earnings Per Share (EPS) Performance
- EPS demonstrated consistent and uninterrupted growth throughout the entire period. Earnings rose from 2.56 USD in 2017 to 8.63 USD in 2021. This linear upward trend indicates a sustained improvement in the company's profitability per share, regardless of the volatility seen in the equity price.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio experienced high volatility, reflecting shifting market sentiment and valuation premiums. An initial contraction occurred in 2018, where the ratio fell to 13.55. This was followed by a sharp expansion, peaking at 59.72 in 2020, which suggests that the share price growth significantly outpaced earnings growth during that period. By 2021, the P/E ratio compressed to 32.73, a result of both a declining share price and a substantial increase in EPS.
The overall trend indicates that while the company successfully scaled its earnings, the market valuation became highly extended in 2020 before undergoing a valuation normalization in 2021.
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Price to Operating Profit (P/OP)
Generac Holdings Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 63,783,651 | 62,861,442 | 62,567,525 | 62,129,621 | 62,325,716 | |
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | 721,136) | 479,106) | 372,163) | 357,181) | 251,064) | |
| Operating profit per share2 | 11.31 | 7.62 | 5.95 | 5.75 | 4.03 | |
| Share price1, 3 | 282.47 | 333.04 | 107.31 | 51.97 | 46.20 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 24.98 | 43.70 | 18.04 | 9.04 | 11.47 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 15.87 | — | — | — | — | |
| Eaton Corp. plc | 19.33 | — | — | — | — | |
| GE Aerospace | 17.46 | — | — | — | — | |
| Honeywell International Inc. | 20.68 | — | — | — | — | |
| Lockheed Martin Corp. | 11.56 | — | — | — | — | |
| RTX Corp. | 28.68 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Capital Goods | 22.96 | — | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Industrials | 22.38 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 721,136,000 ÷ 63,783,651 = 11.31
3 Closing price as at the filing date of Generac Holdings Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 282.47 ÷ 11.31 = 24.98
5 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 is characterized by a significant expansion in market valuation multiples that eventually underwent a correction, contrasting with a consistent and steady increase in fundamental operating profitability.
- Operating Profitability Trends
- Operating profit per share demonstrated uninterrupted growth over the five-year period. Starting at 4.03 US$ in 2017, the figure rose steadily to 11.31 US$ by 2021. This indicates a strong and stable improvement in the company's core operational efficiency and earnings power.
- Equity Price Volatility
- The share price experienced an aggressive ascent, moving from 46.20 US$ in 2017 to a peak of 333.04 US$ in 2020. This represents a massive surge in market capitalization that far outpaced the growth rate of operating profits. A moderate correction occurred in 2021, with the price adjusting to 282.47 US$.
- Price to Operating Profit (P/OP) Analysis
- The P/OP ratio highlights a period of extreme multiple expansion. After a slight dip to 9.04 in 2018, the ratio climbed sharply to 18.04 in 2019 and peaked at 43.70 in 2020. This peak suggests that market expectations became highly optimistic, pricing in future growth far beyond the current operating results. By 2021, the ratio contracted to 24.98; this decline was driven by a combination of a lower share price and the highest recorded operating profit per share, signaling a return toward more sustainable valuation levels.
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Price to Sales (P/S)
Generac Holdings Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 63,783,651 | 62,861,442 | 62,567,525 | 62,129,621 | 62,325,716 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 3,737,184) | 2,485,200) | 2,204,336) | 2,023,464) | 1,672,445) | |
| Sales per share2 | 58.59 | 39.53 | 35.23 | 32.57 | 26.83 | |
| Share price1, 3 | 282.47 | 333.04 | 107.31 | 51.97 | 46.20 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 4.82 | 8.42 | 3.05 | 1.60 | 1.72 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | 1.87 | — | — | — | — | |
| Caterpillar Inc. | 2.26 | — | — | — | — | |
| Eaton Corp. plc | 3.03 | — | — | — | — | |
| GE Aerospace | 1.50 | — | — | — | — | |
| Honeywell International Inc. | 3.73 | — | — | — | — | |
| Lockheed Martin Corp. | 1.57 | — | — | — | — | |
| RTX Corp. | 2.21 | — | — | — | — | |
| P/S Ratio, Sector | ||||||
| Capital Goods | 2.09 | — | — | — | — | |
| P/S Ratio, Industry | ||||||
| Industrials | 2.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 3,737,184,000 ÷ 63,783,651 = 58.59
3 Closing price as at the filing date of Generac Holdings Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 282.47 ÷ 58.59 = 4.82
5 Click competitor name to see calculations.
The financial data from 2017 to 2021 reveals a period of significant volatility in market valuation relative to revenue generation, characterized by a sharp spike in the price-to-sales multiple that peaked in 2020 before undergoing a correction.
- Share Price Trajectory
- The share price exhibited an aggressive upward trend, rising from 46.20 in 2017 to a peak of 333.04 in 2020. Although a slight decline occurred by the end of 2021, with the price settling at 282.47, the overall appreciation over the five-year period remains substantial.
- Revenue Efficiency
- Sales per share demonstrated consistent and linear growth throughout the analyzed period. Increasing from 26.83 in 2017 to 58.59 in 2021, this steady rise indicates a fundamental improvement in top-line performance per equity unit, independent of market price fluctuations.
- Price-to-Sales (P/S) Ratio Dynamics
- The P/S ratio remained relatively stable between 2017 and 2018, ranging from 1.60 to 1.72. A significant valuation expansion began in 2019, with the ratio climbing to 3.05, before accelerating to a peak of 8.42 in 2020. This indicates that share price appreciation during this interval far outpaced the growth in sales. By 2021, the ratio compressed to 4.82, reflecting a valuation realignment as sales per share reached a period high of 58.59 while the share price moderated.
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Price to Book Value (P/BV)
Generac Holdings Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 63,783,651 | 62,861,442 | 62,567,525 | 62,129,621 | 62,325,716 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity attributable to Generac Holdings Inc. (in thousands) | 2,213,774) | 1,390,293) | 1,032,382) | 760,549) | 559,552) | |
| Book value per share (BVPS)2 | 34.71 | 22.12 | 16.50 | 12.24 | 8.98 | |
| Share price1, 3 | 282.47 | 333.04 | 107.31 | 51.97 | 46.20 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 8.14 | 15.06 | 6.50 | 4.25 | 5.15 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 6.62 | — | — | — | — | |
| Eaton Corp. plc | 3.63 | — | — | — | — | |
| GE Aerospace | 2.64 | — | — | — | — | |
| Honeywell International Inc. | 6.91 | — | — | — | — | |
| Lockheed Martin Corp. | 9.62 | — | — | — | — | |
| RTX Corp. | 1.95 | — | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Capital Goods | 4.77 | — | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Industrials | 5.44 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Stockholders’ equity attributable to Generac Holdings Inc. ÷ No. shares of common stock outstanding
= 2,213,774,000 ÷ 63,783,651 = 34.71
3 Closing price as at the filing date of Generac Holdings Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 282.47 ÷ 34.71 = 8.14
5 Click competitor name to see calculations.
The valuation of the equity from 2017 to 2021 is characterized by a significant divergence between the growth of intrinsic book value and the market's pricing of that value, culminating in a period of extreme valuation expansion followed by a partial correction.
- Book Value per Share (BVPS) Growth
- A consistent and linear upward trend is observed in the book value per share, which increased from 8.98 US$ in 2017 to 34.71 US$ in 2021. This steady growth indicates a continuous accumulation of net assets and equity over the five-year period.
- Share Price Trajectory
- The share price exhibited an exponential increase between 2018 and 2020, rising from 51.97 US$ to a peak of 333.04 US$. A subsequent correction occurred in 2021, with the price adjusting to 282.47 US$, although the value remained substantially higher than the levels recorded prior to 2019.
- Price to Book Value (P/BV) Ratio Dynamics
- The P/BV ratio experienced high volatility, reflecting a sharp shift in market sentiment. After remaining relatively stable between 2017 and 2019, the ratio spiked to 15.06 in 2020, indicating that the market price grew at a rate far exceeding the growth of the underlying book value. By 2021, the ratio contracted to 8.14, driven by a combination of the share price decrease and the continued increase in the book value per share.
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