Value
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.9 |
| P/S | 9.2 |
| EV/EBITDA | 7.9 |
| Fwd P/E | 9.4 |
| PEG | 9.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 9.4x
- ▸PEG: 0.56
- ▸Attractively valued
GNTX · Why this verdict
Why Gentex (GNTX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.2/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gentex is an attractively valued auto-electronics franchise with a consistent earnings beat streak and best-in-class peer margins, but the stock has already moved past its resistance-based price target, leaving a negative risk/reward geometry that argues against adding new capital at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company's margins rank at the top of its peer group, and its Piotroski financial health score sits at a perfect 9 out of 9, indicating both superior relative profitability and sound balance-sheet fundamentals. Peer rank | Gross and operating margins hold at or above current peer-relative levels in each of the next four quarterly reports. | ↓Deteriorating |
| CounterFree cash flow converted at only 68% of net income in the most recent measurement period—a quality warning suggesting that headline earnings may be running modestly ahead of underlying cash generation. | ||
Gentex has beaten consensus EPS estimates in three of the last four quarters, with an average positive surprise of roughly 7%, suggesting disciplined cost management and a credible forecasting track record. Earnings | Average EPS surprise stays above 5% over the next four reported quarters, sustaining the delivery cadence. | ↓Deteriorating |
| CounterThe one in-line quarter in the streak and a product revenue base of approximately 89% concentrated in a single automotive category leave earnings exposed to any softness in vehicle production volumes. | ||
At a forward price-to-earnings ratio of 11.7 times and a PEG ratio of 0.87, the stock screens as attractively priced relative to its growth rate and ranks among the cheaper names in its peer group on a price-to-earnings basis. Value | The forward multiple expands toward the mid-teens as earnings growth is sustained, narrowing the valuation discount versus peers. | ↑Improving |
| CounterAttractive headline multiples may reflect the market pricing in automotive-cycle risk; if vehicle production softens, the growth rate underpinning the low PEG could compress faster than the multiple adjusts. | ||
The stock is already trading above its resistance-based price target, leaving negative 0.3% headroom and a risk/reward ratio of negative 0.07—meaning potential downside materially exceeds available upside at current prices. Warnings | If wrong, the stock pulls back below $23.50 before the next earnings report, restoring more than 10% upside to the $25.95 resistance level and creating a positive risk/reward profile. | Tripped→Stable |
| CounterMACD is improving and on-balance volume is rising, indicating internal buying pressure; a sustained earnings beat streak could push resistance levels higher and organically restore a favorable entry geometry. | ||
With approximately 89% of revenue concentrated in automotive rearview mirrors and electronics for a single end market, any structural shift displacing physical mirror systems poses a concentrated revenue risk with limited diversification buffer. Bear case | Non-mirror product lines grow to represent more than 15% of total revenue in the next annual report, reducing single-market dependency. | →Stable |
| CounterDeep specialization in a single automotive system can function as a competitive barrier—long design-cycle contracts and high switching costs for automakers may insulate volumes even as mirror technology gradually evolves. | ||
The company's margins rank at the top of its peer group, and its Piotroski financial health score sits at a perfect 9 out of 9, indicating both superior relative profitability and sound balance-sheet fundamentals.
↓DeterioratingPeer rank
- Expectation
- Gross and operating margins hold at or above current peer-relative levels in each of the next four quarterly reports.
CounterFree cash flow converted at only 68% of net income in the most recent measurement period—a quality warning suggesting that headline earnings may be running modestly ahead of underlying cash generation.
Gentex has beaten consensus EPS estimates in three of the last four quarters, with an average positive surprise of roughly 7%, suggesting disciplined cost management and a credible forecasting track record.
↓DeterioratingEarnings
- Expectation
- Average EPS surprise stays above 5% over the next four reported quarters, sustaining the delivery cadence.
CounterThe one in-line quarter in the streak and a product revenue base of approximately 89% concentrated in a single automotive category leave earnings exposed to any softness in vehicle production volumes.
At a forward price-to-earnings ratio of 11.7 times and a PEG ratio of 0.87, the stock screens as attractively priced relative to its growth rate and ranks among the cheaper names in its peer group on a price-to-earnings basis.
↑ImprovingValue
- Expectation
- The forward multiple expands toward the mid-teens as earnings growth is sustained, narrowing the valuation discount versus peers.
CounterAttractive headline multiples may reflect the market pricing in automotive-cycle risk; if vehicle production softens, the growth rate underpinning the low PEG could compress faster than the multiple adjusts.
The stock is already trading above its resistance-based price target, leaving negative 0.3% headroom and a risk/reward ratio of negative 0.07—meaning potential downside materially exceeds available upside at current prices.
Tripped→StableWarnings
- Expectation
- If wrong, the stock pulls back below $23.50 before the next earnings report, restoring more than 10% upside to the $25.95 resistance level and creating a positive risk/reward profile.
CounterMACD is improving and on-balance volume is rising, indicating internal buying pressure; a sustained earnings beat streak could push resistance levels higher and organically restore a favorable entry geometry.
With approximately 89% of revenue concentrated in automotive rearview mirrors and electronics for a single end market, any structural shift displacing physical mirror systems poses a concentrated revenue risk with limited diversification buffer.
→StableBear case
- Expectation
- Non-mirror product lines grow to represent more than 15% of total revenue in the next annual report, reducing single-market dependency.
CounterDeep specialization in a single automotive system can function as a competitive barrier—long design-cycle contracts and high switching costs for automakers may insulate volumes even as mirror technology gradually evolves.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.3 |
| ROA | 7.3 |
| Gross margin | 3.0 |
| Op margin | 7.3 |
| Net margin | 7.6 |
| Current ratio | 9.8 |
| Moat | 4.1 |
| Piotroski F | 5.6 |
- ▸Strong margins: 15%
- ▸No competitive moat
Growth
1.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
| EPS growth | 0.7 |
- ▸Declining revenue: -1%
Momentum
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.1 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.2%/30d — confirmed downtrend
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.2 |
| Analyst rating | 5.0 |
| Price target | 8.2 |
- ▸LLM news sentiment: -0.36 (n=5)
- ▸Analyst upside: 25%
Insider
6.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.3 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 8.8 |
| growth rank | 1.0 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.8 |
| support resistance | 8.0 |
| 52w position | 4.3 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 2.3 |
| volatility | 5.5 |
| put call | 9.6 |
| implied vol | 5.9 |
| max pain risk | 3.0 |
| beta | 7.9 |
| news risk | 5.0 |
- ▸Above max pain $15
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.6 |
| dividend safety | 9.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:1.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:91d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.9<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.57
Upside
+8.8%
Downside
5.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.3B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:1.9<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.57 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.5, Technical at 7.0, and Catalyst at 6.4; the weakest are Growth at 1.5, Momentum at 1.9, and Peer rank at 5.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Sub One Peg Attractive Valuation
Trip ifPEG ratio rises above 1.5 for 2 consecutive quarters.
- P3Best In Class Peer Margins
Trip ifFree cash flow conversion falls below 50% of net income for 2 consecutive quarters.
- P4Price Above Target Negative SetupTripped
Trip ifStock price falls below $23.50, restoring more than 10% upside to the $25.95 resistance level.
- P5Single Market Concentration Risk
Trip ifRevenue from segments outside automotive rearview mirrors exceeds 20% of total reported annual revenue.