Gentherm Incorporated Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in Gentherm Incorporated (NASDAQ:THRM) had a good week, as its shares rose 3.0% to close at US$51.49 following the release of its quarterly results. Revenues were US$356m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.47, an impressive 32% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Gentherm

Taking into account the latest results, the current consensus from Gentherm's five analysts is for revenues of US$1.54b in 2024. This would reflect an okay 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 77% to US$2.65. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.55b and earnings per share (EPS) of US$2.66 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$69.20. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Gentherm analyst has a price target of US$85.00 per share, while the most pessimistic values it at US$60.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Gentherm shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gentherm's past performance and to peers in the same industry. We would highlight that Gentherm's revenue growth is expected to slow, with the forecast 7.1% annualised growth rate until the end of 2024 being well below the historical 9.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Gentherm.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gentherm's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$69.20, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Gentherm going out to 2025, and you can see them free on our platform here..

Even so, be aware that Gentherm is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.