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1. Company Snapshot

1.a. Company Description

Gentherm Incorporated designs, develops, manufactures, and markets thermal management technologies.The company operates in two segments, Automotive and Medical.The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units that utilize proprietary electronics technology and software; and other climate comfort systems, including neck conditioners and climate control system products for door panels, armrests, cupholders, and storage bins.


It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries, as well as thermal management products for heating and cooling 12 volts, 48 volts, and high voltage batteries and battery modules; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices.This segment serves light vehicle original equipment manufacturers and first tier suppliers, such as automotive seat manufacturers, as well as aftermarket seat distributors and installers.The Medical segment offers patient temperature management systems.


The company provides its products and services in the United States, Germany, Canada, China, Hungary, Japan, South Korea, Romania, Macedonia, Malta, Mexico, the United Kingdom, Ukraine, and Vietnam.The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012.Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.

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1.b. Last Insights on THRM

Gentherm's recent performance was negatively impacted by weak Q4 2024 earnings and revenue, which missed estimates. The company's automotive segment struggled, with revenue declining 4.3%, while the Medical segment saw a 8.1% revenue increase, though it remains a small part of the business. Additionally, Gentherm's 2025 guidance was disappointing, contributing to the negative sentiment. The company's failure to meet expectations and provide a strong outlook has raised concerns about its future performance.

1.c. Company Highlights

2. Gentherm's Q3 Results: Revenue Growth and Operational Excellence

Gentherm reported record quarterly revenue of $387 million, a 4.1% increase from the same period last year, driven by high demand for its products and improved light vehicle industry production. Adjusted diluted earnings per share was $0.73 per share, slightly lower than the $0.75 per share in the third quarter of last year. The company's operational excellence initiatives are gaining traction, contributing to operating cash generation of $88 million year-to-date. The revenue growth was in line with the company's expectations, and the adjusted EPS of $0.73 beat analyst estimates of $0.655.

Publication Date: Oct -27

📋 Highlights
  • Record Revenue Growth:: Q3 revenue reached $387M, up 4.1% YoY, driven by high demand and improved light vehicle production.
  • Significant New Business Awards:: Secured $745M in new contracts, including a major win with Mercedes-Benz.
  • Operational Cash Generation:: Generated $88M in operating cash year-to-date, supporting strategic priorities.
  • Revised Guidance:: Raised revenue forecast to $1.47B–$1.49B and narrowed EBITDA margin to 11.9%-12.3%.
  • Strong Balance Sheet:: Net leverage at 0.2x, ensuring ample capital access for growth initiatives.

New Business Awards and Revenue Guidance

The company secured $745 million in new business awards, including a significant win with Mercedes-Benz, and increased the midpoint of its revenue guidance to $1.47 billion to $1.49 billion. The guidance does not include the potential impact of supply chain disruptions, which seem to be behind them now. Gentherm's management team discussed several issues, including supply chain concerns and their impact on the business, but noted that they have mitigated direct impacts and found alternative sources.

Valuation and Growth Prospects

With a P/E Ratio of 37.13 and an EV/EBITDA of 8.19, the market is pricing in a certain level of growth for Gentherm. Analysts estimate next year's revenue growth at 2.9%. The company's strong balance sheet, with net leverage at 0.2x, provides ample access to capital to deliver on strategic priorities. The ROIC of 4.44% and ROE of 4.57% indicate a decent return on investment, but there is room for improvement.

Strategic Initiatives and M&A

Gentherm is exploring new markets, including the Indian market, which offers an attractive opportunity due to its scale and potential for cooled seats in 2-wheelers. The company's strategic footprint alignment plan aims to drive savings, with an estimated 50 basis points impact this year. For M&A, Gentherm prioritizes building a more resilient business, focusing on market access, product expansion, and margin profiles.

Supply Chain and Operational Risks

The company mentioned that Ford and possibly Stellantis are working to mitigate an issue related to aluminum, but it's difficult to predict the impact. Gentherm hasn't seen any significant schedule shifts yet, and its supply chain team has mitigated direct impacts from the Nexperia issue. The guidance considered the Jaguar issue, which had a headwind in September and will have some hangover in Q4.

3. NewsRoom

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Boston Partners Boosts Stock Holdings in Gentherm Inc $THRM

Dec -01

Source: defenseworld.net

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Financial Survey: Gentherm (NASDAQ:THRM) versus Workhorse Group (NASDAQ:WKHS)

Nov -30

Source: defenseworld.net

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Creative Planning Acquires 56,030 Shares of Gentherm Inc $THRM

Nov -25

Source: defenseworld.net

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Envestnet Asset Management Inc. Sells 16,057 Shares of Gentherm Inc $THRM

Nov -16

Source: defenseworld.net

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Gentherm Announces Participation in Baird Global Industrial Conference

Nov -04

Source: globenewswire.com

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Y Intercept Hong Kong Ltd Has $1.51 Million Stake in Gentherm Inc $THRM

Nov -03

Source: defenseworld.net

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Gentherm Incorporated (THRM) Q3 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

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Gentherm (THRM) Surpasses Q3 Earnings and Revenue Estimates

Oct -23

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.51%)

6. Segments

Automotive

Expected Growth: 6.5%

Gentherm's 6.5% growth in Automotive segment is driven by increasing demand for electric vehicles, rising adoption of advanced driver-assistance systems, and growing need for thermal management solutions. Additionally, the company's focus on innovative products, such as heated and cooled seats, and its partnerships with major OEMs contribute to its growth momentum.

Medical

Expected Growth: 6.8%

Gentherm's Medical segment growth of 6.8% is driven by increasing demand for temperature management solutions in medical devices, rising adoption of minimally invasive procedures, and growing need for patient temperature control during surgeries. Additionally, advancements in medical technology and expanding applications in emerging markets contribute to the segment's growth.

7. Detailed Products

Climate Control Seats (CCS)

Gentherm's Climate Control Seats (CCS) provide heating, ventilation, and cooling functions to enhance driver and passenger comfort.

Heated and Ventilated Seats (HVS)

Gentherm's Heated and Ventilated Seats (HVS) offer heating and cooling functions to enhance driver and passenger comfort.

Thermal Management Systems (TMS)

Gentherm's Thermal Management Systems (TMS) manage heat generation and dissipation in electric vehicles and hybrid electric vehicles.

Battery Thermal Management Systems (BTMS)

Gentherm's Battery Thermal Management Systems (BTMS) manage temperature in electric vehicle batteries to optimize performance and lifespan.

Cabin Comfort Systems (CCS)

Gentherm's Cabin Comfort Systems (CCS) provide heating, ventilation, and cooling functions to enhance passenger comfort in vehicles.

Medical Devices

Gentherm's Medical Devices provide thermal therapy solutions for pain relief, wound care, and physical therapy.

8. Gentherm Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Gentherm Incorporated faces moderate threat from substitutes, as there are limited alternatives to its thermal management solutions. However, the company's focus on innovation and technology advancements helps to mitigate this threat.

Bargaining Power Of Customers

Gentherm Incorporated has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with its customers and its ability to provide customized solutions further reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Gentherm Incorporated has a moderate level of dependence on its suppliers, particularly for raw materials such as copper and aluminum. However, the company's diversified supply chain and long-term contracts with suppliers help to mitigate this risk.

Threat Of New Entrants

The thermal management solutions industry has high barriers to entry, including significant capital expenditures and technological expertise. This makes it difficult for new entrants to compete with established players like Gentherm Incorporated.

Intensity Of Rivalry

The thermal management solutions industry is highly competitive, with several established players competing for market share. Gentherm Incorporated faces intense competition from companies such as Mahle, Valeo, and BorgWarner, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.68%
Debt Cost 8.08%
Equity Weight 72.32%
Equity Cost 11.34%
WACC 10.44%
Leverage 38.27%

11. Quality Control: Gentherm Incorporated passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
XPEL

A-Score: 4.6/10

Value: 4.1

Growth: 9.0

Quality: 7.9

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

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A-Score: 4.5/10

Value: 6.5

Growth: 4.8

Quality: 3.7

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

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Cooper-Standard

A-Score: 4.0/10

Value: 6.7

Growth: 3.2

Quality: 3.5

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

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Gentherm

A-Score: 3.9/10

Value: 5.2

Growth: 4.9

Quality: 5.2

Yield: 0.0

Momentum: 2.5

Volatility: 5.7

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Fox Factory

A-Score: 3.7/10

Value: 8.4

Growth: 5.2

Quality: 3.9

Yield: 0.0

Momentum: 1.5

Volatility: 3.3

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Stoneridge

A-Score: 3.2/10

Value: 7.6

Growth: 4.3

Quality: 2.6

Yield: 0.0

Momentum: 2.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.05$

Current Price

37.05$

Potential

-0.00%

Expected Cash-Flows