Gentex (GNTX) AI Stock Analysis

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Gentex

(NASDAQ:GNTX)

66Neutral

Gentex's overall stock score reflects its strong financial performance and strategic acquisition of VOXX International. However, technical indicators suggest bearish momentum, and recent earnings call highlights several challenges, including declining sales and increased expenses. The valuation appears attractive, offering potential upside for long-term investors.

Positive Factors

Financial Discipline

Management's increased focus on cost control, including reduced capital expenditure guidance, underscores a commitment to better financial discipline.

Growth

Gentex Corporation's outgrowth rebounded strongly, exceeding expectations with a 12% increase, which is expected to restore investor confidence.

Innovation

Gentex is recognized as a highly innovative technology company with a strong track record in developing new products and technologies.

Negative Factors

Earnings

Gentex's 4Q results were softer than expected, leading to an -8.2% stock sell-off.

Financial Performance

The company's 2025 guidance is materially lower than consensus estimates, impacting the stock rating.

Revenue

Adverse customer and segment mix negatively impacted Gentex's production, causing a revenue shortfall.

Gentex (GNTX) vs. S&P 500 (SPY)

Market Cap

$4.82B

Dividend Yield2.23%

Average Volume (3M)2.79M

Price to Earnings (P/E)12.1

Beta (1Y)0.65

Revenue Growth-1.66%

EPS Growth-9.20%

CountryUS

Employees6,184

SectorConsumer Cyclical

Sector Strength59

IndustryAuto - Parts

Share Statistics

EPS (TTM)0.39

Shares Outstanding226,262,120

10 Day Avg. Volume3,287,785

30 Day Avg. Volume2,786,684

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.35

Price to Cash Flow (P/CF)8.80

P/FCF Ratio8.80

Enterprise Value/Market Cap1.30

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit8.14

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$24.50

Price Target Upside13.58% Upside

Rating ConsensusHold

Number of Analyst Covering6

Gentex Business Overview & Revenue Model

Company DescriptionGentex Corporation designs, develops, manufactures, markets, and supplies digital vision, connected car, dimmable glass, and fire protection products in the United States, Germany, Japan, Mexico, and internationally. It operates through Automotive Products and Other segments. The company offers automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, automotive suppliers, and various aftermarket and accessory customers. It also provides variable dimmable windows to aircraft manufacturers and airline operators. In addition, the company offers photoelectric smoke detectors and alarms, electrochemical carbon monoxide alarms and detectors, audible and visual signaling alarms, and bells and speakers used in fire detection systems in office buildings, hotels, and other commercial and residential buildings, as well as researches and develops nanofiber chemical sensing products. The company sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. Gentex Corporation was incorporated in 1974 and is headquartered in Zeeland, Michigan.

How the Company Makes MoneyGentex makes money through the sale of its automotive products, particularly its automatic-dimming rearview mirrors which are widely adopted by major automobile manufacturers worldwide. Revenue is primarily generated from long-term supply agreements with these manufacturers. Additionally, Gentex earns income from its advanced electronic components and systems integrated into vehicles, such as camera-based driver assistance systems and digital vision technologies. The company's strategic partnerships with global automotive manufacturers play a crucial role in sustaining its revenue growth and market presence.

Gentex Financial Statement Overview

Summary

Gentex is financially robust with strong profitability and cash flow generation. The absence of debt enhances its financial stability, although potential growth through leverage is not utilized. Revenue and profit margins are healthy, though some fluctuations in growth rates suggest areas for strategic focus. Overall, Gentex is well-positioned in the vehicles industry, with a solid financial foundation.

Income Statement

Positive

Gentex shows a strong gross profit margin averaging around 33% over recent years, indicating effective cost management. The net profit margin has remained stable, suggesting consistent profitability. Revenue growth has been positive, though slightly fluctuating, with a notable increase in 2023. EBIT and EBITDA margins are healthy, reflecting good operational efficiency.

Balance Sheet

Positive

The company's balance sheet reflects strong equity levels with no reported debt, indicating a conservative financial structure. However, the absence of liabilities data for 2024 limits a comprehensive analysis. The equity ratio remains robust, suggesting financial stability, yet the lack of debt could also imply missed opportunities for leveraging growth.

Cash Flow

Very Positive

Gentex demonstrates strong cash flow generation, with significant free cash flow growth in recent years. The operating cash flow to net income ratio indicates efficient cash conversion. Free cash flow has consistently exceeded net income, showcasing effective cash management and providing a solid foundation for future investments or shareholder returns.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.31B	2.30B	1.92B	1.73B	1.69B
	Gross Profit
771.09M	762.63M	609.81M	619.71M	605.44M
	EBIT
459.73M	495.73M	273.44M	310.67M	294.82M
	EBITDA
563.31M	589.05M	466.57M	409.78M	399.56M
	Net Income Common Stockholders
404.49M	428.40M	318.76M	360.80M	347.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
255.62M	240.79M	237.76M	267.74M	450.54M
	Total Assets
2.76B	2.61B	2.33B	2.13B	2.20B
	Total Debt
0.00	3.57M	0.00	0.00	0.00
	Net Debt
-233.32M	-222.86M	-214.75M	-262.31M	-423.37M
	Total Liabilities
288.72M	298.92M	261.44M	193.40M	234.00M
	Stockholders Equity
2.47B	2.31B	2.07B	1.94B	1.96B
Cash Flow		Free Cash Flow
353.54M	353.57M	191.77M	293.33M	412.79M
	Operating Cash Flow
498.21M	537.25M	338.20M	362.17M	464.49M
	Investing Cash Flow
-202.08M	-299.42M	-172.74M	-113.11M	26.42M
	Financing Cash Flow
-289.25M	-230.15M	-209.02M	-410.12M	-363.86M

Gentex Technical Analysis

Technical Analysis Sentiment

Negative

Last Price21.57

Price Trends

50DMA

23.05

Negative

100DMA

25.24

Negative

200DMA

27.55

Negative

Market Momentum

MACD

-0.39

Negative

RSI

43.56

Neutral

STOCH

37.84

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GNTX, the sentiment is Negative. The current price of 21.57 is above the 20-day moving average (MA) of 21.49, below the 50-day MA of 23.05, and below the 200-day MA of 27.55, indicating a neutral trend. The MACD of -0.39 indicates Negative momentum. The RSI at 43.56 is Neutral, neither overbought nor oversold. The STOCH value of 37.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GNTX.

Gentex Risk Analysis

Gentex disclosed 24 risk factors in its most recent earnings report. Gentex reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Gentex Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VC	77 Outperform	$1.84B	6.94	25.15%	―	-1.35%	-39.06%
ALV	74 Outperform	$6.21B	9.98	28.71%	2.93%	-2.29%	35.00%
DORM	72 Outperform	$3.52B	18.76	15.44%	―	4.11%	50.07%
LEA	69 Neutral	$4.65B	9.68	10.81%	3.55%	-0.70%	-7.27%
GNTX	66 Neutral	$4.82B	12.08	15.95%	2.23%	-1.66%	-9.20%
BWA	65 Neutral	$5.75B	17.42	6.46%	1.50%	-11.11%	-46.32%
Sector *	61 Neutral	$6.65B	11.71	3.09%	3.98%	2.65%	-20.82%

* Consumer Cyclical Sector Average

Performance Comparison

GNTX

Gentex

21.57

-12.37

-36.45%

ALV

Autoliv

94.30

-26.31

-21.81%

BWA

BorgWarner

29.28

-7.17

-19.67%

DORM

Dorman Products

115.27

22.38

24.09%

LEA

Lear

86.81

-37.37

-30.09%

Visteon

79.89

-35.34

-30.67%

Gentex Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: -1.82%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Negative

The earnings call outlined several challenges faced by Gentex Corporation, including declines in sales and income, increased operating expenses, and significant tariff impacts affecting the China market. While there were positive developments such as new product launches and a share buyback program, the overall sentiment reflects concern about immediate financial performance and market conditions.

Q1-2025 Updates

Positive Updates

Introduction of New Products and Technologies

Announced the launch of the full display mirror and driver monitoring systems, highlighting the introduction of these advanced technologies with potential for significant growth.

Share Buyback Program

Repurchased 3.1 million shares of common stock during the first quarter, demonstrating confidence in the company's valuation and financial stability.

Innovative Fire Protection Products

Launched a new line of fire protection devices designed for direct consumer sales, showcasing innovation in non-automotive markets.

Negative Updates

Decline in Net Sales and Income

Net sales decreased to $576.8 million from $590.2 million year-over-year, and net income dropped to $94.9 million from $108.2 million, reflecting challenges in sales performance.

Impact of Tariffs on China Market

Significant impact from tariffs led to halting production for the China market, with expected revenue from China drastically reduced compared to initial forecasts.

Increase in Operating Expenses

Operating expenses increased by 8% to $78.7 million, driven by severance-related costs and merger expenses, impacting overall profitability.

Lower Gross Margins

Gross margin fell to 33.2% from 34.3% due to lower revenue, unfavorable product mix, and new tariff costs, despite sequential improvement.

Trim Mix and Production Challenges

Weakness in trim mix affected take rates for key products, leading to a $25-30 million sales shortfall in the quarter.

Company Guidance

During the call, Gentex Corporation provided detailed guidance for the fiscal year 2025, highlighting several key metrics. The company anticipates revenue in its primary markets to range between $2.1 billion and $2.2 billion, with an additional $50 to $120 million expected from China, despite halting production destined for the China market due to tariff escalations. Gross margins are forecasted to be between 33% and 34%, while operating expenses are projected at $300-$310 million. The estimated annual tax rate is expected to be between 15% and 17%. Capital expenditures are anticipated to be between $101 and $125 million, with depreciation and amortization forecasted to be $85-$90 million. The company also mentioned an expected revenue contribution from the recent merger with VOXX, estimating an annualized addition of $325 to $375 million in revenue, with $240 to $280 million expected for calendar year 2025. However, the company withdrew revenue guidance for 2026 due to significant uncertainty surrounding the China market and ongoing efforts to finalize the financial impact of the VOXX merger.

Gentex Corporate Events

M&A TransactionsBusiness Operations and Strategy

Gentex Completes Strategic Acquisition of VOXX International

Positive

Apr 1, 2025

On April 1, 2025, Gentex completed its acquisition of VOXX International, a global supplier of automotive and consumer electronics, as well as premium audio equipment. This strategic acquisition is expected to increase Gentex’s annual revenue by $325 million to $375 million. The acquisition includes VOXX’s expertise in consumer product distribution and premium audio solutions, which Gentex plans to leverage to expand its smart home product portfolio. Gentex aims to integrate its engineering and high-volume electronics manufacturing expertise with VOXX’s existing capabilities to enhance profitability and strengthen business units.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.