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Gentherm
(NASDAQ:THRM)
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Rating:54Neutral
Price Target:
$29.00
▼(-27.66% Downside)
Action:Reiterated
Date:10/24/26
THRM scores lower primarily due to deteriorating near-term fundamentals (sharp TTM revenue decline, compressed margins, and weaker free cash flow) and bearish technicals (price below key moving averages with negative MACD). These are partially offset by a strong, low-leverage balance sheet and a constructive earnings call emphasizing updated guidance, strong awards momentum, and long-term diversification benefits from the Modine combination, but the very high P/E limits valuation support.
Positive Factors
Diversification
The Modine combination broadens Gentherm beyond automotive comfort systems into power generation, commercial vehicles and heavy-duty equipment. This diversification can reduce reliance on one end market, add secular growth opportunities and create a larger platform for margin and cash-generation improvement.
Negative Factors
Weak Profitability
The sharp TTM revenue decline and compressed net and EBIT margins show that current earnings power is materially weaker than in prior periods. Thin operating profitability leaves less buffer against execution challenges and makes sustained earnings improvement dependent on restoring volume and cost efficiency.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversification
The Modine combination broadens Gentherm beyond automotive comfort systems into power generation, commercial vehicles and heavy-duty equipment. This diversification can reduce reliance on one end market, add secular growth opportunities and create a larger platform for margin and cash-generation improvement.
Read all positive factors
Gentherm (THRM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.50B
Dividend Yield6.42%
Average Volume (3M)1.71M
Price to Earnings (P/E)96.1
Beta (1Y)0.87
Revenue Growth8.79%
EPS Growth-70.33%
CountryUS
Employees18,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.30
Shares Outstanding54,474,980
10 Day Avg. Volume1,820,693
30 Day Avg. Volume1,712,802
Financial Highlights & Ratios
PEG Ratio-0.85
Price to Book (P/B)1.54
Price to Sales (P/S)0.74
P/FCF Ratio18.20
Enterprise Value/Market Cap0.76
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit3.01
Enterprise Value/Ebitda10.67
Forecast
1Y Price Target
$48.25Price Target Upside20.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.88
Revenue Forecast (FY)$1.69B
Gentherm Business Overview & Revenue Model
Company Description
Gentherm Incorporated is a company dedicated to the creation, production, and sale of advanced thermal management technologies. Its operations are divided into two principal business segments: Automotive and Medical. The Automotive segment offers ...
How the Company Makes Money
Gentherm primarily makes money by selling automotive thermal comfort and thermal management products into vehicle production programs. Revenue is generated mainly from (1) production sales of seat comfort systems and related modules/components (e....
Gentherm Earnings Call Summary
Earnings Call Date:Oct 22, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 24, 2027
Earnings Call Sentiment Positive
The call was predominantly positive. Management highlighted strong automotive growth above market, more than $1.6 billion of year-to-date automotive awards, progress in China, new product and medical launches, the Modine combination, solid liquidity and an active share-repurchase program. These positives outweighed the stated challenges of lower industry production, inflation and freight pressure, reduced quarterly profitability and free cash flow, higher SG&A and delays in cost and revenue-synergy realization.Positive Updates
Transformation and Diversification Through Modine Combination
The company said the October 1 combination with Modine Performance Technologies created a fundamentally different business with greater end-market diversification, incremental secular growth drivers, enhanced margin-expansion opportunities and stronger cash-generation potential. The combined company adds exposure to power generation, commercial vehicles and heavy-duty equipment while retaining Gentherm's automotive leadership.
Negative Updates
Lower Light-Vehicle Production and Market Uncertainty
Industry light-vehicle production volumes were down year-over-year during the quarter. Management also cited continuing macroeconomic and geopolitical uncertainty and volatility, while stating that the overall automotive market is still expected to be relatively flat.
Read all updates
Q3-2026 Updates
Positive
Negative
Transformation and Diversification Through Modine Combination
The company said the October 1 combination with Modine Performance Technologies created a fundamentally different business with greater end-market diversification, incremental secular growth drivers, enhanced margin-expansion opportunities and stronger cash-generation potential. The combined company adds exposure to power generation, commercial vehicles and heavy-duty equipment while retaining Gentherm's automotive leadership.
Read all positive updates
Company Guidance
For 2026, Gentherm expects midpoint guidance of revenue of $1.875 billion, adjusted EBITDA of $220 million and free cash flow of approximately $110 million with assumed CapEx of $55 million, including approximately $275 million of revenue, approximately $28 million of adjusted EBITDA and approximately $15 million to $20 million of free cash flow from Modine’s fourth quarter contribution; the legacy Gentherm business is expected to grow mid- to high single digits for the year, with revenue trending towards the higher end of the previous range, while EBITDA is expected to remain near the midpoint and margins are expected to be sequentially higher in the fourth quarter compared to Q3. Gentherm expects to secure at least $2 billion in awards for the fourth consecutive year, build a $100 million home and office business by 2028, with very strong visibility to $30 million in annualized revenue by 2028, and has put out a $1.7 billion revenue number for 2027 for the legacy Gentherm business; revenue synergies will start seeing green shoots in '28, appreciably start seeing some revenue flow through in '29, with the bulk hitting in 2030, while the combined business is expected to generate more than $3.5 billion in revenue and over $500 million in adjusted EBITDA by 2030, with more than $1 billion in adjusted unlevered free cash flow over the next 4 years and $25 million in cost synergies.Gentherm Financial Statement Overview
Summary
Income Statement
45
Neutral
Balance Sheet
78
Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.60B | 1.50B | 1.46B | 1.47B | 1.20B | 1.05B |
| Gross Profit | 378.76M | 362.18M | 366.43M | 351.62M | 273.65M | 303.63M |
| EBITDA | 106.87M | 103.03M | 170.54M | 120.54M | 87.07M | 157.64M |
| Net Income | 9.04M | 18.29M | 64.95M | 40.34M | 24.44M | 93.43M |
Balance Sheet | ||||||
| Total Assets | 1.56B | 1.40B | 1.25B | 1.23B | 1.24B | 935.34M |
| Cash, Cash Equivalents and Short-Term Investments | 252.10M | 160.83M | 134.13M | 149.67M | 153.89M | 190.61M |
| Total Debt | 370.76M | 294.93M | 264.77M | 246.71M | 262.78M | 64.21M |
| Total Liabilities | 840.98M | 676.11M | 630.61M | 589.65M | 567.03M | 281.54M |
| Stockholders Equity | 721.32M | 720.32M | 616.95M | 644.72M | 672.27M | 653.81M |
Cash Flow | ||||||
| Free Cash Flow | 19.80M | 61.12M | 36.33M | 80.85M | -25.25M | 97.05M |
| Operating Cash Flow | 64.98M | 116.79M | 109.65M | 119.27M | 14.95M | 143.08M |
| Investing Cash Flow | -79.37M | -52.40M | -53.53M | -24.12M | -239.90M | -48.83M |
| Financing Cash Flow | 112.76M | -42.48M | -51.70M | -106.05M | 189.93M | -169.14M |
Gentherm Technical Analysis
Negative
40.09
Price Trends
34.03
Negative
34.73
Negative
32.18
Negative
Market Momentum
-1.66
Positive
39.78
Neutral
24.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THRM, the sentiment is Negative. The current price of 40.09 is above the 20-day moving average (MA) of 30.16, above the 50-day MA of 34.03, and above the 200-day MA of 32.18, indicating a bearish trend. The MACD of -1.66 indicates Positive momentum. The RSI at 39.78 is Neutral, neither overbought nor oversold. The STOCH value of 24.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THRM.
Gentherm Risk Analysis
Gentherm disclosed 38 risk factors in its most recent earnings report. Gentherm reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gentherm Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $5.76B | 10.83 | 10.90% | 2.64% | 3.55% | 25.67% | |
65 Neutral | $11.19B | 27.21 | 7.37% | 1.24% | 2.17% | 111.19% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $1.89B | 20.58 | 6.44% | 1.83% | 1.94% | -67.19% | |
55 Neutral | $2.89B | -16.77 | -13.31% | 1.71% | -15.78% | -355.78% | |
55 Neutral | $1.28B | 27.68 | 2.77% | 3.48% | 4.98% | ― | |
54 Neutral | $1.50B | 96.08 | 1.25% | 6.42% | 8.79% | -70.33% |
* Consumer Cyclical Sector Average
THRM
Gentherm
28.60
-6.40
-18.30%
BWA
BorgWarner
54.96
11.50
26.47%
DAN
Dana Incorporated
26.83
7.27
37.14%
LEA
Lear
116.69
17.29
17.40%
VC
Visteon
76.37
-30.00
-28.20%
ADNT
Adient
16.61
-7.46
-30.99%
Gentherm Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Gentherm Updates Outlook After Modine Performance Integration
Negative
Oct 22, 2026
On October 22, 2026, Gentherm reported third-quarter 2026 product revenue of $405.1 million, up 4.7% year over year, driven by strong Automotive Climate and Comfort Solutions growth and $555 million of new automotive awards, but margins compressed...
Business Operations and StrategyExecutive/Board ChangesDividendsM&A TransactionsPrivate Placements and Financing
Gentherm Completes Modine Performance Technologies Reverse Morris Deal
Positive
Oct 1, 2026
On October 1, 2026, Gentherm completed its previously announced Reverse Morris Trust combination with Modine’s Performance Technologies business, creating a global market leader in thermal and precision flow management solutions across multi...
Business Operations and StrategyM&A TransactionsShareholder Meetings
Gentherm Shareholders Approve Key Merger-Related Actions
Positive
Sep 11, 2026
On September 10, 2026, Gentherm held a special shareholder meeting at which approximately 94.8% of eligible common shares were represented, reflecting strong investor participation. Shareholders approved a proposal to issue new common stock under ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.