GNTX - Embedded Expectations Analysis - 2019 08 13
Gentex Corporation (GNTX:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings with a 14.9x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management is concerned about market trends, growth, and their product portfolio.Specifically, management may be concerned about the continued contraction in the automotive market, and they appear concerned about ongoing declines in cash flow driven by changes in working capital. Furthermore, they appear concerned about their ability to meet their full year growth targets, and they may be concerned about their ability to launch their Integrated Toll Module product at two additional OEMs over the next 18 months. Additionally, management may be concerned about continued weakness in their SmartBeam product and about their ability to get their recently purchased Shanghai facility up to their design and build specifications. Finally, management may lack confidence in their ability to invest in future growth and in the sustainability of their share repurchase program.
Gentex designs and manufactures automatic-dimming rearview mirrors and electronics for the automotive industry, dimmable aircraft windows for the aviation industry, and commercial smoke alarms and signaling devices for the fire protection industry. The company's key business involves designing, developing, manufacturing and marketing interior and exterior automatic-dimming automotive rearview mirrors that use electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. The company also designs, develops and manufactures various electronics features to the interior and exterior automotive rearview mirrors as well as interior visors and overhead consoles.
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