THRM - Embedded Expectations Analysis - 2018 02 27
ï€ Gentherm Incorporated (THRM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 11.4x Uniform P/E. At these levels, the market has very bearish expectations for the firm, and given management's confidence about their wheel heaters solutions, as well as the firm's recent performance, this suggests a longer-term buying opportunity. That said, management's concerns about some of their other solutions and demand imply near-term equity upside may be limitedï€ Specifically, management may lack confidence in the sustainability of adjusted EBITDA improvement year-over-year and may also lack confidence in their assertion that integrated intelligent solutions will lead to increased value content. Additionally, they may have concerns about their ability to provide a unique solution to the Japanese normothermia market through the 100-volt Norm-O-Temp and may be exaggerating the interest they are seeing from OEM customers in car of the future technologies. Lastly, they may have concerns about the lower price on vehicles that switched to heat/vent systems from active cooling seat technology. As such, near-term equity upside may be limited, though at current valuations, upside is likely over the long-run
Gentherm designs, develops, and manufactures thermal management technologies. The company's products provide solutions for automotive passenger comfort, battery thermal management, remote power generation, patient temperature management, and other consumer and industrial temperature control needs. The company has two segments: Automotive, which includes climate comfort systems, automotive cable systems, battery thermal management, and automotive electronic and software systems; and Industrial, which includes the company's remote power generation systems business, its patient temperature management systems business, its environmental testing equipment business and its research and product development division.
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