In its latest financial forecast for fiscal year 2025, the company anticipates achieving adjusted EBITDA within a range of 11.5% to 13% of product revenues. This projection reflects the company's commitment to maintaining robust profitability margins amid a dynamic market landscape.
The firm also estimates its full-year effective tax rate to fall between 26% and 29%, indicating a steady fiscal approach that aligns with current regulatory expectations. These tax rate projections are critical for stakeholders assessing the company's net income potential and overall financial health.
Capital expenditures for the year are projected to be between $70 million and $80 million, underscoring the company's focus on strategic investments aimed at sustaining growth and enhancing operational efficiencies. This planned allocation highlights the firm's dedication to long-term value creation through targeted capital deployment.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Gentherm Inc (THRM, Financial) is $40.75 with a high estimate of $59.00 and a low estimate of $27.00. The average target implies an upside of 64.18% from the current price of $24.82. More detailed estimate data can be found on the Gentherm Inc (THRM) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Gentherm Inc's (THRM, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Gentherm Inc (THRM, Financial) in one year is $66.19, suggesting a upside of 166.68% from the current price of $24.82. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Gentherm Inc (THRM) Summary page.
THRM Key Business Developments
Release Date: February 19, 2025
- Automotive New Business Awards: $640 million in Q4; $2.4 billion for the full year 2024.
- Adjusted EBITDA: $183 million for the full year 2024; $41.4 million in Q4, representing 11.7% of sales.
- Revenue: Decreased 3.8% in Q4 compared to the same period last year; full-year revenue decreased 0.9%.
- Net Leverage Ratio: Approximately 0.5 turns at year-end.
- Cash Flow from Operating Activities: $110 million for the year.
- Capital Expenditures: $65 million for the year.
- Share Repurchases: $50 million returned to shareholders in 2024.
- Adjusted Diluted Earnings Per Share: $0.29 in Q4 compared to $0.90 in the same quarter last year.
- Medical Segment Revenue: Increased 9% ex-FX in Q4 compared to the same period last year.
- 2025 Revenue Outlook: Expected to be between $1.4 billion and $1.5 billion.
- 2025 Adjusted EBITDA Margin Outlook: Expected to be in the range of 12% to 13%.
- Capital Expenditures for 2025: Expected to be in the range of $70 to $80 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gentherm Inc (THRM, Financial) has secured significant new business awards, including a Puls.A Award with BMW and a ComfortScale award with General Motors, indicating strong market acceptance of its technologies.
- The company has a strong technology foundation with scalable platforms in thermal management, air moving devices, pneumatic solutions, and valve systems, which are being leveraged across automotive and medical industries.
- Gentherm Inc (THRM) is implementing strategic footprint optimization plans to reduce its production footprint by approximately 30%, aiming to improve margins and cash flow generation.
- The company has maintained a strong balance sheet with a net leverage ratio of 0.5 turns and ample liquidity, supporting future growth plans.
- Gentherm Inc (THRM) is focusing on operational improvements through business process standardization, which is expected to increase margins and drive efficiency across the organization.
Negative Points
- Fourth quarter revenues decreased by 3.8% compared to the same period last year, with foreign exchange adjusted revenue decreasing by 3.3%.
- Adjusted EBITDA margin declined to 11.7% from 13.4% in the fourth quarter of the previous year, impacted by product mix, higher freight costs, and costs related to new plant openings.
- The company faces near-term headwinds due to footprint optimization actions, which are expected to result in one-time costs and production disruptions.
- Gentherm Inc (THRM) anticipates a challenging market environment in 2025, with expected light vehicle production in key markets projected to decrease by roughly 1%.
- The company is experiencing revenue declines in certain segments, such as cables, BPS, and electronics, which are offsetting growth in other areas.
