Gentherm (NASDAQ:THRM) Announces Earnings Results, Misses Estimates By $0.31 EPS

Gentherm (NASDAQ:THRM) issued its quarterly earnings results on Thursday. The auto parts company reported $0.33 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.64 by ($0.31), FiscalAI reports. The business had revenue of $405.10 million for the quarter, compared to analysts’ expectations of $404.16 million. Gentherm had a return on equity of 12.06% and a net margin of 1.68%. The business’s revenue for the quarter was up 4.7% compared to the same quarter last year. During the same quarter in the prior year, the company posted $0.73 EPS.

Here are the key takeaways from Gentherm’s conference call:

• Modine transaction expands Gentherm’s growth platform: Management said the combined company has a path to more than $3.5 billion in revenue and over $500 million in adjusted EBITDA by 2030, supported by diversification into power generation, commercial vehicles and heavy-duty equipment. The company reaffirmed its $25 million cost-synergy target.
• Automotive demand and new business awards remained strong: Gentherm reported $555 million of automotive awards in the quarter and more than $1.6 billion year to date, keeping it on track for at least $2 billion of awards for a fourth consecutive year. Third-quarter automotive revenue rose 4.7%, with climate and comfort solutions up 8.8% and lumbar and massage revenue increasing more than 25%.
• New-market initiatives are gaining traction: The company launched its ThermAffyx medical safety system, acquired Innovative Medical Equipment, and secured an approximately $25 million lifetime-revenue air-moving-device award with an Indian automaker. Gentherm also said its home-and-office business has visibility to $30 million of annualized revenue by 2028 and maintains a pipeline supporting its $100 million target.
• Near-term profitability faced inflation and transaction-related pressure: Third-quarter adjusted EBITDA margin declined to 11.1% from 12.7%, while adjusted EPS fell to $0.33 from $0.73, reflecting material and freight inflation, foreign exchange headwinds, and a higher tax rate. Management said customer recovery negotiations are continuing but may involve a lag, and inflationary pressure could persist into 2027.
• Share repurchases are expected to continue: Gentherm has repurchased approximately 2 million shares for $60 million since the Modine transaction closed and said it expects to remain active in the fourth quarter, with roughly $340 million remaining under its authorization.

Gentherm Price Performance

NASDAQ:THRM opened at $26.15 on Friday. Gentherm has a 12 month low of $25.31 and a 12 month high of $48.35. The stock has a 50 day moving average of $35.88 and a two-hundred day moving average of $35.10. The company has a current ratio of 2.06, a quick ratio of 1.49 and a debt-to-equity ratio of 0.38. The firm has a market cap of $803.85 million, a P/E ratio of 10.12, a price-to-earnings-growth ratio of 0.66 and a beta of 1.37.

Gentherm Announces Dividend

The company also recently disclosed a special dividend, which was paid on Wednesday, October 7th. Investors of record on Monday, September 28th were issued a $1.90 dividend.

Gentherm News Summary

Here are the key news stories impacting Gentherm this week:

• Positive Sentiment: Gentherm raised its 2026 outlook to include Modine’s expected fourth-quarter contribution, targeting product revenue of $1.825 billion–$1.925 billion, adjusted EBITDA of $210 million–$230 million and adjusted free cash flow of $100 million–$120 million. Gentherm Reports 2026 Third Quarter Results
• Positive Sentiment: Product revenue increased 4.7% year over year to $405.1 million, slightly exceeding analyst expectations. Automotive Climate and Comfort Solutions revenue grew 8.8%, while medical revenue rose 14.6%. Gentherm also secured $555 million in automotive awards during the quarter. Gentherm Reports $405.1 Million Third-Quarter Revenue and Net Loss
• Positive Sentiment: Capital returns may support the stock: Gentherm paid a $2.07-per-share special dividend and repurchased $60 million of stock in October, with approximately $340 million remaining under its buyback authorization.
• Neutral Sentiment: Management described the Modine combination as creating a broader, more diversified thermal-management company, but investors will be watching whether projected synergies and growth materialize as integration proceeds. Gentherm’s Earnings Call Highlights Modine-Fueled Expansion
• Negative Sentiment: Adjusted EPS was $0.33, below the $0.64 consensus estimate and down from $0.73 a year earlier. GAAP results showed a $2.6 million net loss versus $14.9 million of profit in the prior-year quarter.
• Negative Sentiment: Gross margin fell to 23.3% from 24.6% because of higher material costs, inflation and foreign-exchange effects. Operating cash flow also dropped to $36.0 million from $87.8 million, adding pressure to the near-term earnings outlook.

Insider Activity at Gentherm

In other news, SVP Wayne Kauffman, III sold 4,700 shares of the firm’s stock in a transaction that occurred on Wednesday, July 29th. The stock was sold at an average price of $43.21, for a total value of $203,087.00. Following the transaction, the senior vice president owned 27,421 shares in the company, valued at $1,184,861.41. This trade represents a 14.63% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. 2.10% of the stock is owned by insiders.

Gentherm announced that its board has initiated a stock buyback program on Thursday, July 23rd that permits the company to buy back $400.00 million in shares. This repurchase authorization permits the auto parts company to buy up to 36.2% of its stock through open market purchases. Stock repurchase programs are often an indication that the company’s board of directors believes its stock is undervalued.

Analysts Set New Price Targets

A number of research firms have recently commented on THRM. Freedom Capital cut Gentherm from a “strong-buy” rating to a “hold” rating in a research report on Friday, July 24th. Stifel Nicolaus set a $48.00 target price on Gentherm in a research report on Monday. Roth Capital reissued a “buy” rating and issued a $50.00 price target on shares of Gentherm in a research note on Wednesday, July 29th. CJS Securities initiated coverage on shares of Gentherm in a research note on Monday, September 14th. They issued an “outperform” rating and a $50.00 price target on the stock. Finally, Zacks Research lowered shares of Gentherm from a “strong-buy” rating to a “hold” rating in a report on Monday, September 28th. Four research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average target price of $44.67.

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.