Gentherm (NASDAQ:THRM) Rating Lowered to Strong Sell at Zacks Research

Key Points

• Zacks Research downgraded Gentherm to “strong sell” from “hold,” while analysts overall maintain a consensus “hold” rating and an average price target of $43.57.
• Gentherm’s shares opened at $32.20 after the company reported quarterly EPS of $0.33, missing the $0.64 consensus estimate, despite revenue rising 4.7% year over year to $405.1 million.
• The company authorized a $400 million stock buyback, while its CEO and a director purchased shares; institutional investors own 97.13% of Gentherm’s outstanding stock.

Gentherm (NASDAQ:THRM - Get Free Report) was downgraded by equities research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a report released on Wednesday, Zacks reports.

Several other brokerages have also weighed in on THRM. Wall Street Zen lowered Gentherm from a "buy" rating to a "hold" rating in a research report on Saturday, October 24th. Stifel Nicolaus cut their target price on Gentherm from $48.00 to $46.00 and set a "buy" rating for the company in a research note on Friday, October 23rd. JPMorgan Chase & Co. reduced their target price on Gentherm from $48.00 to $47.00 and set an "overweight" rating on the stock in a research report on Friday, October 23rd. Freedom Broker raised Gentherm from a "hold" rating to a "buy" rating and set a $40.00 price target on the stock in a research note on Tuesday. Finally, Weiss Ratings cut Gentherm from a "hold (c)" rating to a "sell (d+)" rating in a report on Monday. Five equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, Gentherm has a consensus rating of "Hold" and an average price target of $43.57.

Gentherm Trading Down 2.9%

Shares of Gentherm stock opened at $32.20 on Wednesday. The company has a debt-to-equity ratio of 0.44, a quick ratio of 1.47 and a current ratio of 2.05. Gentherm has a fifty-two week low of $25.31 and a fifty-two week high of $48.35. The firm has a 50-day simple moving average of $34.73 and a two-hundred day simple moving average of $34.07. The company has a market cap of $989.83 million, a P/E ratio of 13.76, a price-to-earnings-growth ratio of 1.25 and a beta of 1.37.

Gentherm (NASDAQ:THRM - Get Free Report) last posted its quarterly earnings data on Thursday, October 22nd. The auto parts company reported $0.33 EPS for the quarter, missing the consensus estimate of $0.64 by ($0.31). The firm had revenue of $405.10 million during the quarter, compared to analyst estimates of $404.16 million. Gentherm had a net margin of 0.57% and a return on equity of 10.30%. The firm's revenue for the quarter was up 4.7% compared to the same quarter last year. During the same period in the prior year, the company posted $0.73 earnings per share. As a group, equities analysts predict that Gentherm will post 2.65 earnings per share for the current fiscal year.

Gentherm declared that its board has approved a stock buyback plan on Thursday, July 23rd that allows the company to repurchase $400 million in shares. This repurchase authorization allows the auto parts company to repurchase up to 36.2% of its shares through open market purchases. Stock repurchase plans are often an indication that the company's board believes its shares are undervalued.

Insider Activity

In other Gentherm news, CEO William T. Presley acquired 5,000 shares of the company's stock in a transaction on Friday, October 23rd. The shares were bought at an average cost of $26.00 per share, for a total transaction of $130,000.00. Following the acquisition, the chief executive officer directly owned 183,314 shares of the company's stock, valued at $4,766,164. This trade represents a 2.80% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Paul Anthony Mascarenas purchased 20,000 shares of the company's stock in a transaction that occurred on Friday, October 23rd. The stock was bought at an average price of $26.63 per share, with a total value of $532,600.00. Following the purchase, the director owned 22,677 shares of the company's stock, valued at approximately $603,888.51. The trade was a 747.10% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Corporate insiders own 2.10% of the company's stock.

Institutional Investors Weigh In On Gentherm

Several large investors have recently made changes to their positions in THRM. BlackRock Inc. purchased a new position in shares of Gentherm during the second quarter valued at $165,005,000. Dimensional Fund Advisors LP lifted its stake in Gentherm by 7.0% in the 1st quarter. Dimensional Fund Advisors LP now owns 1,474,493 shares of the auto parts company's stock worth $40,960,000 after acquiring an additional 96,280 shares in the last quarter. Barrow Hanley Mewhinney & Strauss LLC purchased a new stake in Gentherm in the 2nd quarter worth about $27,822,000. Arrowstreet Capital Limited Partnership boosted its position in Gentherm by 1.8% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 554,641 shares of the auto parts company's stock worth $15,408,000 after acquiring an additional 10,058 shares during the period. Finally, Bank of America Corp DE boosted its position in Gentherm by 7.6% during the 1st quarter. Bank of America Corp DE now owns 307,770 shares of the auto parts company's stock worth $8,550,000 after acquiring an additional 21,677 shares during the period. Institutional investors and hedge funds own 97.13% of the company's stock.

About Gentherm

Gentherm Incorporated NASDAQ: THRM develops and manufactures thermal management and comfort technologies for the automotive and medical industries. The company's automotive products include heated and cooled seating systems, climate-controlled seats, heated steering wheels, seat ventilation, and other technologies designed to improve passenger comfort and manage temperature.

Gentherm also provides battery thermal management systems and related technologies that support the performance, efficiency, and safety of electrified vehicles.

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