GNTX Stock Overview
Gentex 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.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$27.39|
|52 Week High||US$37.90|
|52 Week Low||US$26.16|
|1 Month Change||-4.26%|
|3 Month Change||-6.46%|
|1 Year Change||-16.92%|
|3 Year Change||0.74%|
|5 Year Change||58.32%|
|Change since IPO||6,274.41%|
Recent News & Updates
Gentex (NASDAQ:GNTX) Will Be Looking To Turn Around Its Returns
What underlying fundamental trends can indicate that a company might be in decline? A business that's potentially in...
Gentex Corporation: More Expensive In Spite Of A Lower Price
The financial performance here has been mediocre at best, in my view. The company is less profitable now than it was in both 2019 and 2021. In spite of this, the shares are trading near a multi-year-high valuation, and the dividend yield is flat. Paying more and getting about the same is not great. While I like to sell deep out of the money puts on stocks like this, the premia on offer are too paltry to get excited about. I'd be very happy to buy if the stock dropped about 29% from current levels. It's been about 3 ½ months since I put out my "avoid" piece on Gentex Corporation (GNTX), and in that time the shares are down about 4.7% against a loss of ~3.9% for the S&P 500. The company has reported earnings since, so I thought I'd review the name yet again. After all, a stock trading at $28 is a slightly less risky investment than when the same stock is trading at $29.60. I'll make the determination by looking at the updated financial history here, and by looking at the stock as a thing distinct from the underlying business. Finally, right on cue, I bragged in my previous missive on this name about the premia I'd earned selling puts, but I couldn't sell puts 3 ½ months ago as I considered the premia for reasonable strike prices to be too thin. Now that the shares have fallen in price, it's time to revisit this and determine whether we can make a decent return by selling puts. We're all busy, and many of us spend a great deal of time searching for ways to save time. If you're such a person, you're in luck, because I'm about to offer you my handy "thesis statement" paragraph. It's here where I offer up the gist of my thinking in a convenient, single-paragraph package. I think this stock remains dead money for the moment. The shares are more expensive now than they were when last I reviewed the name, in spite of the fact that the company is far less profitable now than it was in 2021 or 2019. In my previous missive, I pointed out that an investment in a 10-year Treasury Note would produce greater cash flows at arguably less risk, and nothing's changed to convince me otherwise. Finally, while I made some decent returns selling puts previously, that route is no longer available in my view, as the premia on offer are too thin to justify the effort. I think we have to sit around and wait for the inevitable price drop before getting excited. I'd be very happy to buy this name, but it'd need to be trading about 29% cheaper than it currently is before I do so. Financial Snapshot The financial performance for the first half of this year has been poor in my view. Although sales are up slightly relative to the same period in 2021, net income is down significantly. Specifically, revenue is up by about 2.2%, while net income is off by $40 million, or 20%. This is a consequence of the fact that growth in Engineering and SG&A expenses swamped the 2% uptick in sales, with the former up by 14%, and the latter up by over 23%. If your instinct is to find refuge in the idea that 2021 was a particularly good year, making comparisons to that period particularly challenging, allow me to destroy that refuge. For instance, results are even worse in 2022 when compared to the same period in 2019. Sales in 2022 were actually lower slightly (down .6%) and net income is fully 25% lower now than it was then. The same story emerges when comparing 2019 to 2022. Engineering expenses are now about 15% higher than they were, and SG&A expenses are about 36% higher than in 2019. One obvious bright spot is the capital structure. There is virtually no debt here, which obviously reduces the level of risk dramatically. Finally, as the company stated, the dividend will "grow roughly in line with net income growth", I think it would be wise for investors in this company to buy only if they're comfortable with the current yield. The dividend has remained flat for the better part of three years, and I expect this to continue. That said, the capital structure is rock solid, implying that the dividend is quite secure, and for that reason, I'd be very happy to buy in at the right price. Gentex Financials (Gentex investor relations) The Stock You may wonder why my social life is in the miserable state it's in. I'm about to offer you an insight into one of the many reasons. I repeat myself. Often. With that out of the way, prepare for some more repetition when I write to you that I think the business and the stock are quite distinct from each other. Here's what I mean. Every business buys a number of inputs, performs value-adding activities on them and sells the results at a profit. In the final analysis, that's what every business is. The stock, on the other hand, is an ownership stake in the business that gets traded around in a market that aggregates the crowd's rapidly changing views about the future health of the business. It's also possible that the stock's movements relate to the crowd's view about "the market" in general, and have very little to do with what's going on at the company. So, in some sense, the stock is "doubly buffeted" by the crowds' rapidly changing views about a given company, and the crowd's rapidly changing views about the overall stock market, the overall economy, etc. This can be as tiresome as having a friend who either constantly brags, constantly repeats himself, or much worse, both. After all, if the stock's price is really only the present value of all future cash flows (it is), then it shouldn't bounce around in price so much. While this is tiresome, it's also potentially profitable, because these price movements have the potential to create a disconnect between market expectations and subsequent reality. In my experience, this is the only way to generate profits trading stocks: by determining the crowd's expectations about a given company's performance, spotting discrepancies between those assumptions and stock price, and placing a trade accordingly. I've also found it's the case that investors do better/less badly when they buy shares that are relatively cheap, because cheap shares correlate with low expectations. Excessively low expectations correlate with strong future gains. As my regulars know, I measure the relative cheapness of a stock in a few ways. For example, I like to look at the ratio of price to some measure of economic value, like earnings, sales, free cash, and the like. I like to see a company trading at a discount to both the overall market, and to its own history. Previously, I decided to continue to avoid the shares because they were trading at a price to free cash flow of ~24.5 times and sported a paltry dividend yield of about 1.6%. Zoom forward in time and the shares are much more expensive, and the dividend yield has barely budged higher, per the following: GNTX data by YCharts GNTX data by YCharts The fact that investors are paying more and getting basically the same yield is not a great sign in my view. It's enough to cause me to continue to eschew the shares. Before I get excited here, I need to see financial performance improve relative to 2019, and or for the shares to become much more attractively priced. Options Update My regulars know that I love to write deep out-of-the-money put options on decent companies because I think these create "win-win" trades. If the shares remain above the strike, I collect the premia. If the shares drop in price, I'll be obliged to buy, but will do so at a price that I find attractive. When it comes to Gentex, I previously did well, selling 10 December Gentex puts with a strike of $20 for $.70 each. These expired worthless, which boosted my overall return on this name nicely. It's time to look into this again. Is it possible to earn some money while we wait for the shares to fall to a more reasonable level?
|GNTX||US Auto Components||US Market|
Return vs Industry: GNTX exceeded the US Auto Components industry which returned -30.7% over the past year.
Return vs Market: GNTX underperformed the US Market which returned -12.8% over the past year.
|GNTX Average Weekly Movement||5.2%|
|Auto Components Industry Average Movement||8.2%|
|Market Average Movement||7.9%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.2%|
Stable Share Price: GNTX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: GNTX's weekly volatility (5%) has been stable over the past year.
About the Company
Gentex 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.
Gentex Fundamentals Summary
|GNTX fundamental statistics|
Is GNTX overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|GNTX income statement (TTM)|
|Cost of Revenue||US$1.16b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||1.34|
|Net Profit Margin||18.03%|
How did GNTX perform over the long term?See historical performance and comparison
1.8%Current Dividend Yield
Is GNTX undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for GNTX?
Other financial metrics that can be useful for relative valuation.
|What is GNTX's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does GNTX's PE Ratio compare to its peers?
|GNTX PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
Price-To-Earnings vs Peers: GNTX is good value based on its Price-To-Earnings Ratio (20.4x) compared to the peer average (37.9x).
Price to Earnings Ratio vs Industry
How does GNTX's PE Ratio compare vs other companies in the US Auto Components Industry?
Price-To-Earnings vs Industry: GNTX is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the US Auto Components industry average (17.2x)
Price to Earnings Ratio vs Fair Ratio
What is GNTX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||20.4x|
|Fair PE Ratio||14x|
Price-To-Earnings vs Fair Ratio: GNTX is expensive based on its Price-To-Earnings Ratio (20.4x) compared to the estimated Fair Price-To-Earnings Ratio (14x).
Share Price vs Fair Value
What is the Fair Price of GNTX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: GNTX ($27.39) is trading below our estimate of fair value ($60.8)
Significantly Below Fair Value: GNTX is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
Discover undervalued companies
How is Gentex forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score5/6
Future Growth Score 5/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: GNTX's forecast earnings growth (24.6% per year) is above the savings rate (1.9%).
Earnings vs Market: GNTX's earnings (24.6% per year) are forecast to grow faster than the US market (12.8% per year).
High Growth Earnings: GNTX's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: GNTX's revenue (10.7% per year) is forecast to grow faster than the US market (7.9% per year).
High Growth Revenue: GNTX's revenue (10.7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: GNTX's Return on Equity is forecast to be high in 3 years time (24%)
Discover growth companies
How has Gentex performed over the past 5 years?
Past Performance Score1/6
Past Performance Score 1/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: GNTX has high quality earnings.
Growing Profit Margin: GNTX's current net profit margins (18%) are lower than last year (23.7%).
Past Earnings Growth Analysis
Earnings Trend: GNTX's earnings have declined by 3.7% per year over the past 5 years.
Accelerating Growth: GNTX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: GNTX had negative earnings growth (-30.4%) over the past year, making it difficult to compare to the Auto Components industry average (4.8%).
Return on Equity
High ROE: GNTX's Return on Equity (16.1%) is considered low.
Discover strong past performing companies
How is Gentex's financial position?
Financial Health Score6/6
Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: GNTX's short term assets ($991.9M) exceed its short term liabilities ($286.2M).
Long Term Liabilities: GNTX's short term assets ($991.9M) exceed its long term liabilities ($11.7M).
Debt to Equity History and Analysis
Debt Level: GNTX is debt free.
Reducing Debt: GNTX has no debt compared to 5 years ago when its debt to equity ratio was 0.5%.
Debt Coverage: GNTX has no debt, therefore it does not need to be covered by operating cash flow.
Interest Coverage: GNTX has no debt, therefore coverage of interest payments is not a concern.
Discover healthy companies
What is Gentex current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: GNTX's dividend (1.75%) is higher than the bottom 25% of dividend payers in the US market (1.52%).
High Dividend: GNTX's dividend (1.75%) is low compared to the top 25% of dividend payers in the US market (4.09%).
Stability and Growth of Payments
Stable Dividend: GNTX's dividends per share have been stable in the past 10 years.
Growing Dividend: GNTX's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (35.3%), GNTX's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonable cash payout ratio (55.4%), GNTX's dividend payments are covered by cash flows.
Discover strong dividend paying companies
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Steve Downing (44 yo)
Mr. Steven R. Downing, also known as Steve, has been the Chief Executive Officer at Gentex Corporation since January 01, 2018 and has been its President since August 2017. He has been Director of Gentex Co...
CEO Compensation Analysis
Compensation vs Market: Steve's total compensation ($USD3.64M) is below average for companies of similar size in the US market ($USD8.35M).
Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.
Experienced Management: GNTX's management team is seasoned and experienced (7.2 years average tenure).
Experienced Board: GNTX's board of directors are considered experienced (4.2 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: GNTX insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Gentex Corporation's employee growth, exchange listings and data sources
- Name: Gentex Corporation
- Ticker: GNTX
- Exchange: NasdaqGS
- Founded: 1974
- Industry: Auto Parts and Equipment
- Sector: Automobiles
- Implied Market Cap: US$6.440b
- Shares outstanding: 235.13m
- Website: https://www.gentex.com
Number of Employees
- Gentex Corporation
- 600 North Centennial Street
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/06 00:00|
|End of Day Share Price||2022/08/05 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.