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Gentherm Pops 8% On Optimistic 2021 Revenue Outlook, 4Q Beat

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Shares of Gentherm rose 8.3% on Monday after delivering better-than-expected earnings and revenues for the fourth quarter. Furthermore, the developer of innovative thermal management technologies forecasted 2021 revenues above consensus estimates.

Gentherm (THRM) reported 4Q product revenues of $288.9 million, which grew 25.4% year-over-year and exceeded the Street’s estimates of $257.3 million. While automotive revenues surged 27% year-over-year, medical revenues declined 9.1% in 4Q due to the negative impact of COVID-19 on elective surgeries.

The company delivered 4Q earnings of $1.16 per share, which outpaced consensus estimates of $0.71 and increased 17.2% from the year-ago period.

For 2021, the company foresees revenues in the range of $1.05-$1.13 billion, ahead of analysts’ projections of $1.02 billion. Gentherm expects “light vehicle production in the Company’s key markets growing at a low-teens rate in 2021 versus 2020.”

Company CEO, Phil Eyler, said, “While we expect continued market uncertainties in 2021, the momentum on the topline, expanding demand for our new technologies, especially in the EV market, coupled with our strong win rate of new awards position us well to continue to deliver significant shareholder value over the long term.” (See Gentherm stock analysis on TipRanks).

Following the results, Roth Capital analyst Matt Koranda raised the stock’s price target to $85 (11% upside potential) from $53 and maintained a Buy rating. In a note to investors, Koranda said that 4Q results were strong and added that the bookings environment looks favorable for Gentherm.

Overall, the rest of the Street has a cautious outlook on the stock, with a Hold consensus rating based on 1 Hold, 1 Buy and 2 Sells. The average analyst price target of $67.50 implies downside potential of about 12% to current levels. Shares have gained about 88% in value over the past year.

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