Gentex (NasdaqGS:GNTX) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Gentex Corporation (NasdaqGS:GNTX) is scheduled to report Q3 earnings results before markets open for trading on October 23, 2020.

The company is expected to report earnings of $0.41/share on revenue of $459.4 million. The consensus earnings per share (EPS) of $0.41/share is based on a poll of 7 analysts and represents a decline in eps of −6.4% over the same quarter last year, when the company reported earnings of $0.44/share.

The revenue forecast of $459.4 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −3.8%. Last year the company reported $477.8 million in revenue for the quarter.

Expected to report EPS contraction of −6.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $459.39 $477.76 −3.8%
EPS $0.41 $0.44 −6.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Gentex Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.13 $0.02 −84.3% Missed
Q1, 2020 $0.35 $0.36 3.2% Beat
Q4, 2019 $0.37 $0.39 4.5% Beat
Q3, 2019 $0.42 $0.44 4.4% Beat
Q2, 2019 $0.40 $0.42 5.4% Beat
Q1, 2019 $0.39 $0.40 1.5% Beat
Q4, 2018 $0.44 $0.41 −6.0% Missed
Q3, 2018 $0.41 $0.42 2.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 24, 2020 $26.28 $26.29 0.0% Increase
April 24, 2020 $23.23 $24.13 3.9% Increase
January 31, 2020 $30.95 $29.77 −3.8% Decline
October 18, 2019 $27.59 $27.95 1.3% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.19, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.19 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Gentex Corporation is currently trading at $27.36/share, down −0.7% for the day. The company is trading at approximately 87.5% of its 52-week high of $31.27/share. The company’s stock price is up 4.1% since the last earnings report and up 0.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 55.43 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GNTX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 22.82 and a forward P/E multiple of 23.15.

Gentex Corporation’s current share price also implies a price-to-book (P/B) multiple of 3.69. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $27.36
P/E Ratio 22.8x
P/E Ratio (Fwd) 23.2x
PEG Ratio −0.8
Total Debt / Total Capital 1.1%
Levered Free Cash Flow $355 million
EV / EBITDA 14.0x

Finbox

Gentex Corporation is a mid-cap stock with a market capitalization of $6.725 billion and a total enterprise value of $6.388 billion. The company operates in the Consumer Discretionary sector and the Auto Components industry.

Gentex Corporation provides digital vision, connected car, dimmable glass, and fire protection products worldwide. It operates through Automotive Products and Other segments. The company designs, develops, manufactures, and markets 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. It also manufactures and sells variable dimmable windows to aircraft manufacturers and airline operators. In addition, the company provides photoelectric smoke detectors and alarms, electrochemical carbon monoxide detectors and alarms, audible and visual signaling alarms, and bells and speakers used in fire detection systems in office buildings, hotels, and other commercial and residential establishments. It sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. Gentex Corporation was founded in 1974 and is headquartered in Zeeland, Michigan.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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