GNTX - Embedded Expectations Analysis - 2021 03 09
Gentex Corporation (GNTX:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 16.4x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain stable, but management may be concerned about their 2021 gross margin guidance, operational efficiency, and their PayByCar partnershipSpecifically, management may lack confidence in their ability to meet their 2021 gross margin guidance, realize operational efficiencies, and continue to pay off outstanding debt maturities. Furthermore, they may have concerns about their expansion into the automotive HVAC business and continued travel restrictions. Finally, they may be concerned about the sustainability of Full Display Mirror's (FDM) take rate and their partnership with PayByCar to integrate ITM hardware into non-toll-based transactions
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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