GENCOR INDUSTRIES INC (GENC) Stock Analysis
GENCOR INDUSTRIES INC (GENC) Stock Analysis
Overall Grade: F (Concerning)
View interactive company profile →
GENCOR INDUSTRIES INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 13.8% | Solid returns |
| FCF Margin | -3.0% | Cash flow pressure |
| Debt/Equity | 0.0x | Conservative leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is GENCOR INDUSTRIES INC's Profitability and ROIC?
GENCOR INDUSTRIES INC's return on invested capital of 13.8% is around industry norms. Gross margin of 27.7% with operating margin at 11.6% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 13.8% | Good | Adequate returns |
| Return on Equity (ROE) | 7.3% | Warning | Moderate equity returns |
| Gross Margin | 27.7% | Adequate | Competitive pricing environment |
| Operating Margin | 11.6% | Good | Moderate operational efficiency |
How Strong is GENCOR INDUSTRIES INC's Cash Flow Quality?
GENCOR INDUSTRIES INC generated $-3.2M in free cash flow over the trailing twelve months, representing a -3.0% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | -3.0% | Red flag | Thin cash margins |
| Free Cash Flow (TTM) | $-3.2M | Red flag | Cash burn |
| OCF/Net Income | -0.0x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is GENCOR INDUSTRIES INC's Financial Health?
GENCOR INDUSTRIES INC's debt-to-equity ratio of 0.0x indicates conservative leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 0.0x | Excellent | Conservative capital structure |
Is GENCOR INDUSTRIES INC Stock Overvalued or Undervalued?
GENCOR INDUSTRIES INC trades at a P/E of 12.5x, representing a premium to the sector median of N/A.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 12.5x | Adequate | Reasonable valuation |
| EV/Sales | -1.3x | Excellent | Attractive revenue multiple |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 13.8% | Top 50% | 1.7x above |
| Free Cash Flow Margin | -3.0% | Bottom 10% | -0.6x below |
| Gross Margin | 27.7% | Bottom 50% | 0.8x below |
| Operating Margin | 11.6% | Top 50% | 1.4x above |
| Return on Equity (ROE) | 7.3% | Bottom 50% | 0.8x below |
| P/E Ratio | 12.5x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 13.8% (Good - Top 50% of sector (median: 8.0%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: -3.0% (Red flag)
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 27.7% (Adequate - Bottom 50% of sector (median: 33.4%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 0.0% (Excellent)
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 12.5x (Adequate)
Frequently Asked Questions
Q: What is GENCOR INDUSTRIES INC's Return on Invested Capital (ROIC)?
GENCOR INDUSTRIES INC (GENC) has a trailing twelve-month Return on Invested Capital (ROIC) of 13.8%. This compares above the sector median of 8.0%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is GENCOR INDUSTRIES INC's Free Cash Flow Margin?
GENCOR INDUSTRIES INC (GENC) has a free cash flow margin of -3.0%, generating $-3.2 million in free cash flow over the trailing twelve months. Negative free cash flow means the company is consuming cash, which may require financing.
Q: Is GENCOR INDUSTRIES INC stock overvalued or undervalued?
GENCOR INDUSTRIES INC (GENC) trades at a P/E ratio of 12.5x, which is above the sector median of N/A. The EV/Sales multiple is -1.3x.
Q: What is GENCOR INDUSTRIES INC's revenue and earnings growth?
GENCOR INDUSTRIES INC (GENC) declined revenue by 9.2% year-over-year. Earnings per share increased by 9.5% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: How does GENCOR INDUSTRIES INC compare to competitors in Industrials?
Compared to other companies in Industrials, GENCOR INDUSTRIES INC (GENC) shows: ROIC of 13.8% is above the sector median of 8.0% (Top 27%). FCF margin of -3.0% trails the sector median of 5.4%. Gross margin at 27.7% is 5.7 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with GENCOR INDUSTRIES INC?
Investors in GENCOR INDUSTRIES INC (GENC) should monitor these potential warning signs: 1) FCF margin is thin at -3.0%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-K filed 2025-12-09. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.