Gentex (NASDAQ:GNTX) Shares Gap Up on Strong Earnings

Key Points

• Gentex Corporation shares gapped up significantly from $23.60 to $27.55 following a strong earnings announcement that exceeded expectations.
• The company reported $0.47 earnings per share, surpassing the consensus estimate of $0.39, and had quarterly revenue of $657.86 million, well above the expected $591.94 million.
• Gentex also announced a quarterly dividend of $0.12 per share, representing a 1.76% dividend yield, along with a stock buyback plan for up to 40 million shares.
• Analysts generally rated the stock as a "Hold," with a consensus target price of $28.28.

Shares of Gentex Corporation (NASDAQ:GNTX - Get Free Report) gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $23.60, but opened at $27.55. Gentex shares last traded at $27.38, with a volume of 805,439 shares traded.

The auto parts company reported $0.47 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.39 by $0.08. Gentex had a return on equity of 16.11% and a net margin of 17.01%. The business had revenue of $657.86 million during the quarter, compared to analyst estimates of $591.94 million. During the same period last year, the company earned $0.37 earnings per share. Gentex's quarterly revenue was up 14.8% compared to the same quarter last year.

Gentex Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, July 23rd. Investors of record on Wednesday, July 9th were issued a dividend of $0.12 per share. The ex-dividend date of this dividend was Wednesday, July 9th. This represents a $0.48 annualized dividend and a dividend yield of 1.76%. Gentex's dividend payout ratio is 28.07%.

Gentex declared that its board has authorized a stock buyback plan on Wednesday, July 16th that authorizes the company to buyback 40,000,000 outstanding shares. This buyback authorization authorizes the auto parts company to repurchase shares of its stock through open market purchases. Stock buyback plans are usually an indication that the company's board of directors believes its shares are undervalued.

Analyst Ratings Changes

Several equities analysts have weighed in on the company. Robert W. Baird raised their target price on Gentex from $25.00 to $26.00 and gave the company a "neutral" rating in a report on Friday, July 11th. Industrial Alliance Securities set a $25.00 target price on Gentex in a report on Friday, July 11th. Guggenheim cut their target price on Gentex from $30.00 to $24.00 and set a "buy" rating on the stock in a report on Tuesday, April 22nd. UBS Group restated a "neutral" rating and set a $23.00 target price (up from $21.00) on shares of Gentex in a report on Monday, July 14th. Finally, The Goldman Sachs Group restated a "neutral" rating on shares of Gentex in a report on Friday, July 11th. Seven research analysts have rated the stock with a hold rating and two have assigned a buy rating to the stock. According to MarketBeat, the stock has a consensus rating of "Hold" and an average target price of $28.28.

Insider Activity

In other news, Director Joseph B. Anderson, Jr. sold 3,764 shares of the firm's stock in a transaction dated Friday, May 16th. The stock was sold at an average price of $22.87, for a total value of $86,082.68. Following the sale, the director directly owned 5,939 shares of the company's stock, valued at approximately $135,824.93. This trade represents a 38.79% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Corporate insiders own 0.45% of the company's stock.

Institutional Investors Weigh In On Gentex

Hedge funds and other institutional investors have recently made changes to their positions in the business. LPL Financial LLC grew its position in shares of Gentex by 31.6% in the fourth quarter. LPL Financial LLC now owns 189,254 shares of the auto parts company's stock valued at $5,437,000 after purchasing an additional 45,475 shares during the last quarter. Principal Financial Group Inc. grew its position in shares of Gentex by 0.4% in the first quarter. Principal Financial Group Inc. now owns 523,489 shares of the auto parts company's stock valued at $12,197,000 after purchasing an additional 1,923 shares during the last quarter. Marshall Wace LLP acquired a new stake in shares of Gentex in the fourth quarter valued at about $10,868,000. Asset Management One Co. Ltd. grew its position in shares of Gentex by 5.9% in the first quarter. Asset Management One Co. Ltd. now owns 219,454 shares of the auto parts company's stock valued at $5,113,000 after purchasing an additional 12,168 shares during the last quarter. Finally, Praxis Investment Management Inc. acquired a new stake in shares of Gentex in the first quarter valued at about $359,000. 86.76% of the stock is owned by institutional investors and hedge funds.

Gentex Stock Up 15.8%

The firm has a market capitalization of $6.15 billion, a price-to-earnings ratio of 16.03 and a beta of 0.81. The business has a 50-day moving average of $22.29 and a two-hundred day moving average of $23.51.

About Gentex

Gentex Corporation designs, develops, manufactures, markets, and supplies digital vision, connected car, dimmable glass, and fire protection products in the United States, Germany, Japan, Mexico, Republic of Korea, and internationally. It operates through Automotive Products and Other segments. The company offers automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, automotive suppliers, and various aftermarket and accessory customers.

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