This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.
While the market may be concerned about the auto cycle, THRM is focusing on growing into the main-stream market, gaining share, sustaining ROA’, driving Asset’ growth and are confident on executing on innovation to drive growth
THRM is trading at a 12.1x UAFRS-based P/E (V/E’), in the middle of historical valuations. The market appears to expect Adjusted Asset Growth to be at the lower end of rates since 2009, at around 15% a year, with low profitability expectations too. While THRM has consistently been able to produce UAFRS-based ROA that is more than 3x corporate averages, at above 18%, the past seven years, the market expects Adjusted ROA to fade to 7% levels. The company has not seen Adjusted ROA at or below these levels, outside of 2009, since before 2005, when the company was still starting up.