Company Reports

Gentex held an investor day at its Michigan headquarters. Management laid out a vision for 2032 with annual revenue reaching $4.5 billion-$7.1 billion and an enterprise value of $10 billion (currently $4.3 billion), with new segments and products contributing just over half of total sales.

Gentex's stock fell over 5% during July 24 trading after the firm reported second-quarter revenue down 1% year over year and missed the LSEG consensus. Adjusted diluted EPS of $0.58 rose 16% and beat the $0.50 LSEG consensus. Mirror units shipped fell 10% on an 18% decline outside North America.

Gentex manufactures auto-dimming interior and exterior electrochromic mirrors. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With about 2,600 patents worldwide, some valid through 2050, and nearly 80% market share, Gentex has a narrow economic moat that it should be able to protect for a long time, in our opinion.

Despite higher input costs on memory and commodities, Gentex's first-quarter adjusted earnings per share of $0.48 beat the $0.45 LSEG consensus. Gross margin excluding the Voxx acquisition increased 80 basis points year over year to 34%; including Voxx, margin increased 60 basis points to 33.8%.

Gentex manufactures auto-dimming interior and exterior electrochromic mirrors. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With about 2,600 patents worldwide, some valid through 2050, and nearly 80% market share, Gentex has a narrow economic moat that it should be able to protect for a long time, in our opinion.

Gentex manufactures auto-dimming interior and exterior electrochromic mirrors. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With about 2,600 patents worldwide, some valid through 2050, and nearly 80% market share, Gentex has a narrow economic moat it should be able to protect for a long time, in our opinion.

Gentex stock fell over 5% intraday on Jan. 30 after the company reported fourth-quarter revenue that missed LSEG consensus by about $10 million. Core gross margin, excluding VOXX, rose 300 basis points year over year to 35.5%, meeting Gentex's target of 35%-36% by year-end.

Gentex stock closed down 10.2% on Oct. 24 after reporting third-quarter diluted EPS of $0.46 that missed the LSEG consensus by one penny. Management raised the lower end of 2025 revenue and gross margin guidance.

Gentex's second-quarter adjusted diluted EPS of $0.47 beat the $0.38 LSEG consensus and sent the stock up over 15% during July 25 trading. Management gave guidance that included VOXX, which Gentex acquired on April 1, and 2025 consolidated gross margin is higher than previously implied.

Gentex's first quarter saw diluted EPS fall 11% year over year but still match the $0.42 LSEG consensus. Large tariffs on US-China trade led Gentex to announce it has halted auto dimming mirror shipments to China, reduced 2025 revenue and gross margin guidance, and withdrawn 2026 guidance.

Gentex manufactures auto-dimming interior and exterior electrochromic mirrors. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With over 2,300 patents worldwide, some valid through 2046, and over 85% market share, up from 77% in 2003, Gentex has a narrow economic moat it should be able to protect for a long time, in our opinion.

The White House on March 5 said that the 25% tariffs on vehicles imported into the US from Canada and Mexico that began a day earlier will be delayed for one month, provided those vehicles comply with the United States-Mexico-Canada Agreement. The change came after President Donald Trump spoke with the leaders of the Detroit Three, who argued that the tariffs hurt firms such as theirs but not those that export vehicles into the US from nations such as Japan, Germany, and South Korea. White House comments to the media on March 5 indicate that tariffs on all vehicle imports regardless of the country of origin will still commence on April 2, so we think 25% or reciprocal tariffs will start at that time.

The 25% tariffs on all US imports from Canada and Mexico began on March 4. As discussed in our Nov. 26 note on General Motors and Ford, these tariffs are punishment for what President Donald Trump feels are inadequate measures by these two nations and China for fentanyl and illegal immigration into the US. Lately, White House rhetoric seems more focused on fentanyl than immigration. We consider these tariffs very bad news for our US autos coverage, but for now, we are leaving our fair value estimates in place.

Gentex manufactures auto-dimming rear- and side-view mirrors that use electrochromic technology. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With over 2,300 patents worldwide, some valid through 2046, and over 85% market share, up from 77% in 2003, Gentex has a narrow economic moat it should be able to protect for a long time, in our opinion.

Gentex’s fourth-quarter results were surprisingly weak for a company that consistently outperforms industry growth. Diluted EPS of $0.39 fell 22% year over year and missed the $0.48 LSEG consensus, sending the stock down 8.1% on Jan. 31. Revenue fell 8.1% and the company said about half its nearly $50 million revenue shortfall versus budget came from lower full display mirror shipments. FDM shipments still rose 21% for the full year, and the company sees about 300,000 units of FDM growth from 2.96 million in 2024. We are leaving our fair value estimate in place but will review all modeling assumptions as part of rolling the model for the 10-K soon to be filed.

We are raising our Gentex fair value estimate to $40 from $38 after the company’s Dec. 18 announcement to buy the remaining roughly 70% of shares of VOXX International it does not already own for $7.50 per share in cash. The valuation increase reflects time value of money, nearly $100 million in incremental EBITDA modeled over our five-year explicit forecast period, and a slightly lower tax rate to reflect $15 million-$20 million of tax benefits VOXX brings Gentex over the next five to six years. We calculate a $128.1 million cash outlay for Gentex, and the deal is expected to close in first-quarter 2025. There is a $7.5 million termination fee. We calculate Gentex’s cost basis in VOXX, which it has bought in three tranches since October 2023, is $7.50 per share. VOXX’s Dec. 17 closing price was $7.77, but the $7.50 price is well above the $2.85 per share VOXX traded at before announcing Aug. 27 that it was pursuing strategic alternatives. Gentex earlier this year made an offer to buy VOXX at $5.50 per share. A VOXX press release puts the enterprise value at about $196 million, which is roughly 0.5 times where fiscal 2025 revenue (mostly automotive) was tracking.

Gentex manufactures auto-dimming rear- and side-view mirrors that use electrochromic technology. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With over 2,200 patents worldwide, some valid through 2048, and nearly 90% market share, up from 77% in 2003, Gentex has a narrow economic moat it should be able to protect for a long time, in our opinion.

We expect trade policy and electric vehicle tax credits to be the US auto industry focus of a second US presidential term for Donald Trump. Emission regulations will also likely come into play, as we don't expect the Trump administration to grant California a waiver to set its own rules under the Clean Air Act of 1970. We also expect Environmental Protection Agency rules for 2027-32 model years issued in March, which, relative to the 2026 rule, call for a nearly 50% reduction in average light vehicle fleet carbon dioxide emissions for 2032 down to 85 grams (73 for cars and 90 for trucks) of C02 per mile, to be reduced or eliminated.

Gentex’s stock rose 5.4% on Oct. 25 after it reported third-quarter results that beat the LSEG consensus (diluted EPS of $0.53 versus $0.48 consensus). We are not changing our fair value estimate. Revenue rose 5.7% year over year while mirror shipments fell 3%, both of which outperformed a 6% light vehicle production decline in the firm’s core markets of North America, Europe, Japan, and Korea. We think the firm had a strong quarter in light of numerous challenges such as mixed headwinds, frequent customer changes leading to manufacturing waste and overtime, and struggling production in regions like Europe taking about $25 million-$30 million from revenue. Gentex’s revenue growth plus purchasing cost reductions negotiated by its skilled buying team still enabled gross margin to rise by 30 basis points to 33.5%. This metric was also 60 basis points higher than the second quarter. Management expects fourth-quarter results similar to the third quarter, which we think is reasonable provided a region like Europe doesn't see a collapse in production.

Gentex manufactures auto-dimming rear- and side-view mirrors that use electrochromic technology. These mirrors automatically darken to eliminate headlight glare for drivers and have many other applications. With over 2,200 patents worldwide, some valid through 2048, and nearly 90% market share, up from 77% in 2003, Gentex has a narrow economic moat it should be able to protect for a long time, in our opinion.