November 30, 2018

THRM – Management’s confidence in their margin expansion and focused growth activities, coupled with overly-bearish market expectations, suggests longer-term upside remains warranted


  • Gentherm Incorporated (THRM:USA)currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 15.3x Uniform P/E, implying bearish expectations for the firm. However, given management’s confidence about their margin expansion and focused growth initiatives, longer-term outperformance remains warranted
  • Specifically, while management’s concerns about light vehicles and pipeline opportunities suggest the potential for near-term headwinds, market expectations for Uniform ROA to decline to levels not seen since the Great Recession are still too bearish, especially given their confidence about their focused growth and margin expansion. As such, multiple expansion and equity upside remain warranted in the long-term
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