Value
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 9.6 |
| EV/EBITDA | 5.4 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 10.7x
- ▸PEG: 0.06
- ▸Attractively valued
THRM · Why this verdict
Why Gentherm (THRM) 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 score5.5/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gentherm is an auto-parts supplier at a 9.3x forward P/E with 847% FCF/NI and 46% upside to the analyst target, but it has no moat, is 97% automotive, missed EPS by 48% in October and trades in a downtrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Cash conversion is excellent at 847% FCF/NI and the Piotroski F-Score is 8/9, although the business has no competitive moat. Quality breakdown | FCF/NI should stay above 100% and the Piotroski F-Score at 7 or higher. | ↓Deteriorating |
| CounterA very high FCF/NI ratio can come from depressed net income, and the lack of a moat limits pricing power. | ||
The stock trades at a 9.3x forward P/E with a PEG of 0.06, and analysts see 68% upside, with a $41.76 target (46.0% above the $28.60 price). Valuation breakdown | Price should move toward the $41.76 target as earnings recover over 12 months. | ↓Deteriorating |
| CounterAnalyst coverage is light, which dampens the signal, and the October miss may force target cuts. | ||
EPS has swung between 2 beats and 2 misses in the last four quarters, with the latest at 0.33 vs 0.64 estimated, a 48.2% miss. Earnings | EPS should meet or beat consensus in the next report, due 2027-02-18, and return above 0.50 per share. | ↓Deteriorating |
| CounterTwo quarters of large beats (0.84 and 0.75) show that the October result may be a one-off. | ||
The automotive segment is 97.0% of revenue and 66.0% of sales come from outside the United States, two high-severity concentration risks. Bear case | Automotive share should stay at or below 97% and revenue should grow toward the $471M next-quarter estimate. | ↑Improving |
| CounterDeep automotive specialization can create expertise and customer lock-in, while the international mix diversifies away from U.S. demand alone. | ||
Momentum is weak at 3.3/10 with price below its 200-day average, which slopes down 1.4% over 30 days, a put/call ratio of 1.44 and 101% implied volatility. Momentum breakdown | Price should reclaim the 200-day average and momentum should rise above 4.5 within two quarters. | ↑Improving |
| CounterConfirmed downtrends tend to persist, and insiders sold $243,056 in the last 90 days. | ||
Cash conversion is excellent at 847% FCF/NI and the Piotroski F-Score is 8/9, although the business has no competitive moat.
↓DeterioratingQuality breakdown
- Expectation
- FCF/NI should stay above 100% and the Piotroski F-Score at 7 or higher.
CounterA very high FCF/NI ratio can come from depressed net income, and the lack of a moat limits pricing power.
The stock trades at a 9.3x forward P/E with a PEG of 0.06, and analysts see 68% upside, with a $41.76 target (46.0% above the $28.60 price).
↓DeterioratingValuation breakdown
- Expectation
- Price should move toward the $41.76 target as earnings recover over 12 months.
CounterAnalyst coverage is light, which dampens the signal, and the October miss may force target cuts.
EPS has swung between 2 beats and 2 misses in the last four quarters, with the latest at 0.33 vs 0.64 estimated, a 48.2% miss.
↓DeterioratingEarnings
- Expectation
- EPS should meet or beat consensus in the next report, due 2027-02-18, and return above 0.50 per share.
CounterTwo quarters of large beats (0.84 and 0.75) show that the October result may be a one-off.
The automotive segment is 97.0% of revenue and 66.0% of sales come from outside the United States, two high-severity concentration risks.
↑ImprovingBear case
- Expectation
- Automotive share should stay at or below 97% and revenue should grow toward the $471M next-quarter estimate.
CounterDeep automotive specialization can create expertise and customer lock-in, while the international mix diversifies away from U.S. demand alone.
Momentum is weak at 3.3/10 with price below its 200-day average, which slopes down 1.4% over 30 days, a put/call ratio of 1.44 and 101% implied volatility.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day average and momentum should rise above 4.5 within two quarters.
CounterConfirmed downtrends tend to persist, and insiders sold $243,056 in the last 90 days.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.4 |
| ROA | 3.2 |
| Gross margin | 0.7 |
| Op margin | 2.5 |
| Net margin | 0.3 |
| Current ratio | 7.2 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 4.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.9 |
| Analyst rating | 6.7 |
| Price target | 9.4 |
- ▸Light analyst coverage (7.0) — signal dampened
- ▸Analyst upside: 45%
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 6.0 |
| holder change | 6.5 |
- ▸Modest insider buying — $622,631 (0.034% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.0 |
| quality rank | 2.1 |
| growth rank | 4.8 |
Technical
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.7 |
| 52w position | 4.6 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 9.6 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 3.0 |
| max pain risk | 7.0 |
| beta | 5.5 |
| debt equity | 7.9 |
| news risk | 6.0 |
- ▸High IV: 62%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 7.4 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.0>=5.5
- ASYMMETRY:1.7>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:111d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.73
Upside
+25.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.8B) below institutional reach
SuitabilityAggressive — Beta 1.37>1.3, MCap $1.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.6) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 1.73 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.6, Sentiment at 7.3, and Momentum at 7.0; the weakest are Technical at 1.9, Growth at 3.7, and Peer rank at 3.9. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 1.73 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation Analyst Upside
Trip ifAnalyst target falls below $33 from the current $41.76.
- P2Excellent Cash Conversion
Trip ifFCF/NI falls below 100% from the current 847%, or Piotroski F-Score drops below 6 from 8.
- P3Inconsistent Earnings
Trip ifEPS misses estimates by more than 20% in the 2027-02-18 report.
- P4Auto Concentration International
Trip ifQuarterly revenue falls below $380M from the recent $416M.
- P5Downtrend Negative Momentum
Trip ifPrice falls below the $26.60 stop-loss, with momentum score under 3.0 from the current 3.3.