Gentherm Inc (NASDAQ: THRM)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0000903129
Market Cap 1.17 Bn
P/B 1.64
P/E 38.36
P/S 0.80
ROIC (Qtr) 6.55
Div Yield % 0.00
Rev 1y % (Qtr) 4.13
Total Debt (Qtr) 248.97 Mn
Debt/Equity (Qtr) 0.35

About

Gentherm Inc., under the stock symbol THRM, operates as a prominent entity in the automotive and medical industries, specializing in thermal management and pneumatic comfort technologies. The company is segmented into Automotive and Medical sectors, each with unique offerings and markets. The Automotive segment focuses on the design, development, manufacturing, and sales of automotive climate comfort systems, lumbar and massage comfort solutions, automotive cable systems, battery performance solutions, valve systems, and automotive electronic and...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 124.38M provides robust 0.50x coverage of total debt 248.97M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 154.25M provide 14.99x coverage of short-term debt 10.29M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 124.38M provides strong 11.61x coverage of stock compensation 10.71M, indicating sustainable incentive practices.
  • Strong tangible asset base of 1.22B provides 4.89x coverage of total debt 248.97M, indicating robust asset backing and low credit risk.
  • Retained earnings of 711.10M provide full 2.98x coverage of long-term debt 238.68M, indicating strong internal capital position.

Bear case

  • Operating cash flow of 124.38M barely covers its investment activities of (50.17M), with a coverage ratio of -2.48, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (50.17M) provide weak support for R&D spending of 92.28M, which is -0.54x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 75.86M show weak coverage of depreciation charges of 52.37M, with a 1.45 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 52.37M relative to operating cash flow of 124.38M, which is 0.42x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 72.13M represents just -2.17x of debt issuance (33.21M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.95 1.16
EV to Cash from Ops. EV/CFO 10.58 9.30
EV to Debt EV to Debt 5.29 34.64
EV to EBIT EV/EBIT 17.35 4.45
EV to EBITDA EV/EBITDA 9.34 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 18.25 17.25
EV to Market Cap EV to Market Cap 1.12 1.58
EV to Revenue EV/Rev 0.90 3.42
Price to Book Value [P/B] P/B 1.64 -0.33
Price to Earnings [P/E] P/E 38.36 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.18
Dividend per Basic Share Div per Share (Qtr) 0.00 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.70
Interest Coverage Int. cover (Qtr) 5.32 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 2.48 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 2.44 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -53.82 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -15.90 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) -24.53 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) -26.11 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) -52.80 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) 22.81 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -5.08 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.06 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.25
Cash Ratio Cash Ratio (Qtr) 0.39 0.69
Current Ratio Curr Ratio (Qtr) 1.96 2.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.35 0.22
Interest Cover Ratio Int Coverage (Qtr) 5.32 -110.44
Times Interest Earned Times Interest Earned (Qtr) 5.32 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.70 -952.44
EBIT Margin % EBIT Margin % (Qtr) 5.17 -997.37
EBT Margin % EBT Margin % (Qtr) 4.19 -987.56
Gross Margin % Gross Margin % (Qtr) 24.30 -122.43
Net Profit Margin % Net Margin % (Qtr) 2.10 -979.78