Gentex stock falls on missed revenue forecast

Investing.com -- Shares of Gentex (NASDAQ:GNTX) Corporation (NASDAQ: GNTX) tumbled 8% following a fourth-quarter earnings report where the company’s revenue and 2025 forecast fell short of Wall Street expectations. The automotive technology firm reported Q4 earnings per share (EPS) of $0.39, which was below the analyst consensus of $0.49. Revenue for the quarter was reported at $541.6 million, also missing the projected $604.6 million.

Gentex’s guidance for fiscal year 2025 anticipates revenue between $2.4 and $2.45 billion, which is notably below the consensus estimate of $2.6 billion.

The company’s Q4 results revealed a decline in net sales by 8% YoY, from $589.1 million in the fourth quarter of 2023 to $541.6 million in the same period of 2024. This decrease was attributed to a 6% drop in light vehicle production in Gentex’s primary markets, which include North America, Europe, and Japan and Korea, as well as a weaker vehicle build mix.

Gentex President and CEO Steve Downing commented on the challenges faced during the quarter, noting that significant market weakness impacted vehicle production volumes and product mix, which led to a revenue shortfall of approximately $45 to $50 million against the company’s initial forecast for the quarter.

The gross margin for Q4 2024 was reported at 32.5%, a decrease from the 34.5% seen in the same quarter of the previous year. This reduction was largely due to lower sales levels, a weaker product mix, and the inability to leverage overhead costs.

Despite a challenging year, Gentex managed to post a slight increase in net sales for the calendar year 2024, setting a new annual sales record at $2.31 billion, a 1% increase from 2023. The company credited this outperformance to growth in Full Display Mirror® unit shipments, which rose by 21% compared to the previous year.

CFRA analyst Garrett Nelson expressed disappointment with the revenue guidance, stating, "Revenue guidance was a disappointment and management is now targeting a year-end 2025 gross margin of approximately 35% vs. 35%-36% previously." Nelson lowered the 12-month target price for Gentex stock and adjusted the EPS estimates for 2025 and 2026.

Investors reacted negatively to both the reported earnings miss and the subdued outlook for the upcoming years, reflecting concerns over Gentex’s ability to navigate a challenging automotive market.

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