Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.2 |
| P/S | 8.9 |
| EV/EBITDA | 6.8 |
| Fwd P/E | 9.1 |
| PEG | 8.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.3x
- ▸PEG: 0.83
- ▸Attractively valued
GNTX · Why this verdict
Why Gentex (GNTX) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gentex is an attractively valued auto-electronics franchise with a consistent earnings beat streak and best-in-class peer margins, but the stock has already moved past its resistance-based price target, leaving a negative risk/reward geometry that argues against adding new capital at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company's margins rank at the top of its peer group, and its Piotroski financial health score sits at a perfect 9 out of 9, indicating both superior relative profitability and sound balance-sheet fundamentals. Peer rank | Gross and operating margins hold at or above current peer-relative levels in each of the next four quarterly reports. | →Stable |
| CounterFree cash flow converted at only 68% of net income in the most recent measurement period—a quality warning suggesting that headline earnings may be running modestly ahead of underlying cash generation. | ||
Gentex has beaten consensus EPS estimates in three of the last four quarters, with an average positive surprise of roughly 7%, suggesting disciplined cost management and a credible forecasting track record. Earnings | Average EPS surprise stays above 5% over the next four reported quarters, sustaining the delivery cadence. | →Stable |
| CounterThe one in-line quarter in the streak and a product revenue base of approximately 89% concentrated in a single automotive category leave earnings exposed to any softness in vehicle production volumes. | ||
At a forward price-to-earnings ratio of 11.7 times and a PEG ratio of 0.87, the stock screens as attractively priced relative to its growth rate and ranks among the cheaper names in its peer group on a price-to-earnings basis. Value | The forward multiple expands toward the mid-teens as earnings growth is sustained, narrowing the valuation discount versus peers. | →Stable |
| CounterAttractive headline multiples may reflect the market pricing in automotive-cycle risk; if vehicle production softens, the growth rate underpinning the low PEG could compress faster than the multiple adjusts. | ||
The stock is already trading above its resistance-based price target, leaving negative 0.3% headroom and a risk/reward ratio of negative 0.07—meaning potential downside materially exceeds available upside at current prices. Warnings | If wrong, the stock pulls back below $23.50 before the next earnings report, restoring more than 10% upside to the $25.95 resistance level and creating a positive risk/reward profile. | →Stable |
| CounterMACD is improving and on-balance volume is rising, indicating internal buying pressure; a sustained earnings beat streak could push resistance levels higher and organically restore a favorable entry geometry. | ||
With approximately 89% of revenue concentrated in automotive rearview mirrors and electronics for a single end market, any structural shift displacing physical mirror systems poses a concentrated revenue risk with limited diversification buffer. Bear case | Non-mirror product lines grow to represent more than 15% of total revenue in the next annual report, reducing single-market dependency. | →Stable |
| CounterDeep specialization in a single automotive system can function as a competitive barrier—long design-cycle contracts and high switching costs for automakers may insulate volumes even as mirror technology gradually evolves. | ||
The company's margins rank at the top of its peer group, and its Piotroski financial health score sits at a perfect 9 out of 9, indicating both superior relative profitability and sound balance-sheet fundamentals.
→StablePeer rank
- Expectation
- Gross and operating margins hold at or above current peer-relative levels in each of the next four quarterly reports.
CounterFree cash flow converted at only 68% of net income in the most recent measurement period—a quality warning suggesting that headline earnings may be running modestly ahead of underlying cash generation.
Gentex has beaten consensus EPS estimates in three of the last four quarters, with an average positive surprise of roughly 7%, suggesting disciplined cost management and a credible forecasting track record.
→StableEarnings
- Expectation
- Average EPS surprise stays above 5% over the next four reported quarters, sustaining the delivery cadence.
CounterThe one in-line quarter in the streak and a product revenue base of approximately 89% concentrated in a single automotive category leave earnings exposed to any softness in vehicle production volumes.
At a forward price-to-earnings ratio of 11.7 times and a PEG ratio of 0.87, the stock screens as attractively priced relative to its growth rate and ranks among the cheaper names in its peer group on a price-to-earnings basis.
→StableValue
- Expectation
- The forward multiple expands toward the mid-teens as earnings growth is sustained, narrowing the valuation discount versus peers.
CounterAttractive headline multiples may reflect the market pricing in automotive-cycle risk; if vehicle production softens, the growth rate underpinning the low PEG could compress faster than the multiple adjusts.
The stock is already trading above its resistance-based price target, leaving negative 0.3% headroom and a risk/reward ratio of negative 0.07—meaning potential downside materially exceeds available upside at current prices.
→StableWarnings
- Expectation
- If wrong, the stock pulls back below $23.50 before the next earnings report, restoring more than 10% upside to the $25.95 resistance level and creating a positive risk/reward profile.
CounterMACD is improving and on-balance volume is rising, indicating internal buying pressure; a sustained earnings beat streak could push resistance levels higher and organically restore a favorable entry geometry.
With approximately 89% of revenue concentrated in automotive rearview mirrors and electronics for a single end market, any structural shift displacing physical mirror systems poses a concentrated revenue risk with limited diversification buffer.
→StableBear case
- Expectation
- Non-mirror product lines grow to represent more than 15% of total revenue in the next annual report, reducing single-market dependency.
CounterDeep specialization in a single automotive system can function as a competitive barrier—long design-cycle contracts and high switching costs for automakers may insulate volumes even as mirror technology gradually evolves.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.2 |
| ROA | 7.2 |
| Gross margin | 2.9 |
| Op margin | 7.5 |
| Net margin | 7.4 |
| Current ratio | 9.2 |
| FCF quality | 5.2 |
| Moat | 6.1 |
| Piotroski F | 10.0 |
- ▸Earnings quality warning: 68% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.8 |
| EPS growth | 3.9 |
Momentum
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.5 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 5.0 |
| Price target | 7.1 |
- ▸LLM news sentiment: +0.50 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $631,483 (0.012% of mkt cap)
Peer rank
7.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 8.1 |
| growth rank | 7.6 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.2 |
| support resistance | 3.5 |
| 52w position | 7.6 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.9 |
| days to cover | 3.8 |
| volatility | 6.2 |
| put call | 3.5 |
| implied vol | 3.1 |
| max pain risk | 3.0 |
| beta | 8.3 |
| debt equity | 8.3 |
- ▸High IV: 61%
- ▸Above max pain $18
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.9 |
| dividend safety | 7.0 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 192.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:29d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.4<4.5
- ASYMMETRY:-0.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.01
Upside
+0.0%
Downside
7.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 54 mid-range, Bollinger mid-band
EdgeCATALYST — Earnings in 29d with 3/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Value at 7.4; weakest: Momentum at 3.4. No conviction either direction.
The strongest dimensions are Value at 7.4, Peer rank at 7.4, and Quality at 6.7; the weakest are Momentum at 3.4, Technical at 4.8, and Insider at 5.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.01 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Gentex has beaten consensus EPS estimates in three of the last four quarters, with an average positive surprise of roughly 7%, suggesting disciplined cost management and a credible forecasting track record.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2At a forward price-to-earnings ratio of 11.7 times and a PEG ratio of 0.87, the stock screens as attractively priced relative to its growth rate and ranks among the cheaper names in its peer group on a price-to-earnings basis.
Trip ifPEG ratio rises above 1.5 for 2 consecutive quarters.
- P3The company's margins rank at the top of its peer group, and its Piotroski financial health score sits at a perfect 9 out of 9, indicating both superior relative profitability and sound balance-sheet fundamentals.
Trip ifFree cash flow conversion falls below 50% of net income for 2 consecutive quarters.
- P4The stock is already trading above its resistance-based price target, leaving negative 0.3% headroom and a risk/reward ratio of negative 0.07—meaning potential downside materially exceeds available upside at current prices.
Trip ifStock price falls below $23.50, restoring more than 10% upside to the $25.95 resistance level.
- P5With approximately 89% of revenue concentrated in automotive rearview mirrors and electronics for a single end market, any structural shift displacing physical mirror systems poses a concentrated revenue risk with limited diversification buffer.
Trip ifRevenue from segments outside automotive rearview mirrors exceeds 20% of total reported annual revenue.