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Gentex Corp GNTX

Morningstar Rating
$36.97 +0.21 (0.57%)
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Company Report

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.

Price vs Fair Value

GNTX is trading at a 3% discount.
Price
$36.98
Fair Value
$64.00
Uncertainty
Medium
1-Star Price
$96.80
5-Star Price
$67.20
Economic Moat
Kybfrm
Capital Allocation
Myntmhdg

Bulls Say, Bears Say

Bulls

Auto-dimming technology has applications to other parts of the car like headlights, as well as airplane windows and healthcare. Although small now, markets outside the auto industry could prove to be very large businesses down the road.

Bears

Cameras could replace Gentex's mirrors, if regulators throughout the world allowed it. We don't think this is a likely threat, at least not anytime in the near future in very large volume.

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News

Trading Information

Previous Close Price
$36.76
Day Range
$36.8037.25
52-Week Range
$25.7737.25
Bid/Ask
$36.66 / $40.00
Market Cap
$8.56 Bil
Volume/Avg
1.1 Mil / 1.3 Mil

Key Statistics

Price/Earnings (Normalized)
20.10
Price/Sales
3.69
Dividend Yield (Trailing)
1.30%
Dividend Yield (Forward)
1.30%
Total Yield
3.02%

Company Profile

Gentex was founded in 1974 to produce smoke-detection equipment. The company sold its first glare-control interior mirror in 1982 and its first model using electrochromic technology in 1987. Automotive revenue is about 98% of total revenue. The company is constantly developing new applications for the technology to remain on top. Sales in 2022 totaled about $1.9 billion with 44.2 million mirrors shipped. The unit mix breaks out as 65% interior and 35% exterior, versus about 32% exterior in 2020. The company is based in Zeeland, Michigan.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Small Growth
Total Number of Employees
5,466

Competitors

Valuation

Metric
GNTX
APTV
MGA
Price/Earnings (Normalized)
20.1016.1510.82
Price/Book Value
3.701.901.31
Price/Sales
3.691.110.36
Price/Cash Flow
15.479.925.30
Price/Earnings
GNTX
APTV
MGA

Financial Strength

Metric
GNTX
APTV
MGA
Quick Ratio
2.071.150.72
Current Ratio
3.671.721.11
Interest Coverage
5.309.47
Quick Ratio
GNTX
APTV
MGA

Profitability

Metric
GNTX
APTV
MGA
Return on Assets (Normalized)
18.80%14.60%4.91%
Return on Equity (Normalized)
21.28%33.67%13.23%
Return on Invested Capital (Normalized)
21.28%20.44%8.76%
Return on Assets
GNTX
APTV
MGA
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