Gentex Earnings: Chip Shortage Recovery Starting to Boost Results

Gentex’s stock rose by over 7% on Jan. 26 after the firm reported a 35.1% increase in fourth-quarter diluted earnings per share to $0.50, which beat the $0.44 Refinitiv consensus. We are not changing our fair value estimate but will review all modeling assumptions after we roll our model forward for the 10-K. With the auto industry recovering from the chip shortage and Gentex’s continued ability to grow revenue at a far higher rate than light-vehicle production in its core markets, we think the firm can reach its 2024 revenue guidance of $2.45 billion to $2.55 billion and its gross margin target of 35%-36% at the end of 2024. Guidance for 2025 is $2.7 billion at the midpoint.