Generac Power Systems (NYSE: GNRC), a key player in the design, manufacture, and provision of energy technology solutions, has completed the acquisition of Ageto, which is known for its advanced microgrid controllers.
The acquisition, finalized on August 1, 2024, is set to enhance Generac's offerings in the commercial and industrial sector by integrating Ageto's technology into its energy systems.
Ageto's microgrid controllers are designed to integrate and manage a mix of conventional power sources, renewable energy, and electric vehicle chargers. The technology complements Generac's existing solutions, which include Battery Energy Storage Systems (BESS) and generator sets.
The partnership between Generac and Ageto began in 2021 when Generac started incorporating Ageto's controllers into its energy storage and generator products, the company said in a release.
Erik Wilde, EVP and president of Domestic C&I at Generac, stated that this move strengthens the company's ability to provide a comprehensive energy technology ecosystem for customers with multiple asset sites. The integration of Ageto's microgrid controller and software aims to simplify the management of energy assets and provide a competitive edge for Generac in the market.
Generac has a history of innovation since its inception in 1959, including the introduction of the first affordable backup generator and the creation of the automatic home standby generator category. The company continues to expand its energy technology offerings, with a focus on developing resilient, efficient, and sustainable energy solutions.
Generac Holdings (NYSE:GNRC) reported steady net sales of $998 million in the second quarter of 2024, matching the previous year's figure. The company saw mixed results across its product lines, with an 8% growth in residential product sales offset by a 10% fall in Global Commercial & Industrial (C&I) product sales.
Generac's gross profit margin improved to 37.6%, and adjusted EBITDA for the quarter stood at $165 million. The company is investing in distribution, advertising, and production to meet demand and has made a $35 million minority investment in Wallbox (NYSE:WBX) to expand its EV charging solutions.
InvestingPro Insights
In the wake of Generac Power Systems' (NYSE: GNRC) strategic acquisition of Ageto, investors and industry watchers are keenly observing the company's financial health and market performance. With an eye on Generac's recent integration of advanced microgrid controllers into its energy solutions portfolio, let's dive into some critical metrics and insights provided by InvestingPro.
Generac, with a market capitalization of $8.6 billion, is navigating the energy technology sector with a Price to Earnings (P/E) ratio of 37.56, reflecting investor expectations of future earnings growth. This is underscored by an adjusted P/E ratio for the last twelve months as of Q2 2024, which stands at 36.24. The company's PEG ratio during the same period is 0.63, suggesting that its stock price may be undervalued relative to its earnings growth potential. Additionally, Generac's revenue for the last twelve months as of Q2 2024 amounts to $4.02 billion, with a slight revenue contraction of 0.1%.
Generac's strategic initiatives, including the Ageto acquisition, are supported by a solid financial foundation, as indicated by two notable InvestingPro Tips. Firstly, analysts have a positive outlook on Generac's net income, expecting it to grow this year. This is further reinforced by a consensus among 11 analysts who have revised their earnings projections upwards for the upcoming period, signaling confidence in the company's financial trajectory post-acquisition.
For those interested in a deeper dive into Generac's financials and market performance, InvestingPro offers a range of additional tips. There are currently 11 more InvestingPro Tips available, which can provide investors with a comprehensive understanding of Generac's position and prospects in the energy technology market.
Generac's recent moves, including the integration of Ageto's microgrid technology, are aimed at consolidating its market position and enhancing its product offerings. The financial data and insights from InvestingPro suggest that the company is well-positioned to capitalize on growth opportunities in the evolving energy sector.
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