Price to Operating Profit (P/OP)
since 2010
Calculation
Generac Holdings Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income from operations1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 22, 2022 | 24.98 | = | 282.47 | ÷ | 11.31 | 11.31 | = | 721,136 | ÷ | 63,783,651 | |
| Feb 23, 2021 | 43.70 | = | 333.04 | ÷ | 7.62 | 7.62 | = | 479,106 | ÷ | 62,861,442 | |
| Feb 25, 2020 | 18.04 | = | 107.31 | ÷ | 5.95 | 5.95 | = | 372,163 | ÷ | 62,567,525 | |
| Feb 26, 2019 | 9.04 | = | 51.97 | ÷ | 5.75 | 5.75 | = | 357,181 | ÷ | 62,129,621 | |
| Feb 26, 2018 | 11.47 | = | 46.20 | ÷ | 4.03 | 4.03 | = | 251,064 | ÷ | 62,325,716 | |
| Feb 24, 2017 | 12.05 | = | 39.30 | ÷ | 3.26 | 3.26 | = | 204,617 | ÷ | 62,735,597 | |
| Feb 26, 2016 | 12.87 | = | 34.83 | ÷ | 2.71 | 2.71 | = | 179,561 | ÷ | 66,366,949 | |
| Feb 27, 2015 | 11.61 | = | 49.29 | ÷ | 4.25 | 4.25 | = | 293,375 | ÷ | 69,093,775 | |
| Mar 3, 2014 | 11.25 | = | 57.49 | ÷ | 5.11 | 5.11 | = | 351,465 | ÷ | 68,779,944 | |
| Mar 13, 2013 | 10.52 | = | 34.44 | ÷ | 3.27 | 3.27 | = | 223,555 | ÷ | 68,278,598 | |
| Mar 9, 2012 | 15.60 | = | 25.96 | ÷ | 1.66 | 1.66 | = | 112,981 | ÷ | 67,906,706 | |
| Mar 7, 2011 | 13.49 | = | 18.04 | ÷ | 1.34 | 1.34 | = | 90,296 | ÷ | 67,524,596 |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Generac Holdings Inc. Annual Report.
The financial trajectory between 2011 and 2022 is characterized by a prolonged period of valuation stability followed by a period of extreme volatility. While operating profit per share grew consistently throughout the entire observed timeframe, the share price experienced a non-linear acceleration that decoupled from operational growth starting in 2020.
- Valuation Stability (2011-2019)
- During this interval, the Price to Operating Profit (P/OP) ratio remained relatively constant, fluctuating between a low of 9.04 and a high of 15.60. This suggests that the market valuation closely tracked the company's operational performance, as share price increases were generally supported by corresponding growth in operating profit per share.
- Exponential Valuation Expansion (2020-2021)
- A significant shift occurred between 2020 and 2021, where the P/OP ratio escalated from 18.04 to a peak of 43.70. This sharp increase was driven by a surge in share price, which rose from 107.31 USD to 333.04 USD. Although operating profit per share also increased from 5.95 USD to 7.62 USD, the magnitude of the share price appreciation far exceeded the growth in operational profitability, resulting in a substantial expansion of the valuation multiple.
- Correction and Operational Alignment (2022)
- In 2022, the P/OP ratio contracted to 24.98. This decline resulted from a combination of a share price reduction to 282.47 USD and a robust increase in operating profit per share to 11.31 USD. The significant growth in operational earnings acted as a stabilizing force, bringing the ratio down from its 2021 peak, although the valuation remained elevated compared to the historical averages recorded prior to 2020.
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Comparison to Competitors
Generac Holdings Inc., P/OP, long-term trends, comparison to competitors
| Generac Holdings Inc. | Boeing Co. | Caterpillar Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|
| Feb 22, 2022 | 24.98 | — | 15.87 | 11.56 | 28.68 |
| Feb 23, 2021 | 43.70 | — | 24.23 | 10.63 | — |
| Feb 25, 2020 | 18.04 | — | 9.08 | 14.49 | 15.07 |
| Feb 26, 2019 | 9.04 | 19.08 | 9.20 | 11.62 | 12.16 |
| Feb 26, 2018 | 11.47 | 19.69 | 21.70 | 16.47 | 11.53 |
| Feb 24, 2017 | 12.05 | 17.20 | 116.61 | 13.51 | 10.86 |
| Feb 26, 2016 | 12.87 | 10.36 | 11.66 | 12.17 | 9.71 |
| Feb 27, 2015 | 11.61 | 13.96 | 9.71 | 10.89 | 11.15 |
| Mar 3, 2014 | 11.25 | 14.75 | 10.94 | 11.62 | 10.88 |
| Mar 13, 2013 | 10.52 | 9.09 | 7.30 | 6.40 | 10.73 |
| Mar 9, 2012 | 15.60 | 9.69 | 10.41 | 7.21 | 9.40 |
| Mar 7, 2011 | 13.49 | 10.76 | 16.44 | 6.84 | 10.86 |
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), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).