Gentex Earnings: Gross Margin Expansion Plan Remains on Track

Gentex reported first-quarter 2024 results that show its chip shortage recovery and gross margin efforts are on track, giving us no reason to change our fair value estimate. Management also maintained its full-year guidance and 2025 revenue guidance of $2.65 billion to $2.75 billion. Diluted EPS of $0.47 matched the LSEG consensus and rose 11.9% year over year. As is its custom, Gentex’s revenue growth outperformed industry production changes in its core markets of North America, Europe, Japan, and Korea. Light vehicle production in these regions fell by a combined 3%, while revenue rose 7.2% to an all-time quarterly record of $590.2 million, though that still missed LSEG consensus of $598 million. Gentex’s outperformance comes from its high technology-contented mirrors and continued growth globally from exterior auto-dimming mirrors. We see record revenue in 2024 and 2025 is possible if the world avoids recessions. The company repurchased 1.2 million shares in the quarter for $43 million, and we expect more buybacks this year.