Gentex Corporation (GNTX): what the price requires

At today's price, Gentex Corporation (GNTX) is priced for -4.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/GNTX

Headline

FieldValue
TickerGNTX
CompanyGentex Corporation
Current price$23.99/sh
CompositionAutomotive Products - U.S. 28% / Automotive Products - China 6% / Automotive Products - Germany 10% / Automotive Products - Japan 15% / Automotive Products - Mexico 7% / Automotive Products - Republic of Korea 7% / Automotive Products - Other countries 17% / Premium Audio Products - U.S. 4% / Premium Audio Products - Other countries 2% / Other 5%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed5.1%
Operating margin today18.6%
Margin compression implied-13.5pp
Implied growth-4.0%
Multiple paid10x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5pp.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.78σ
cohort percentile (of 210 peers)15
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.10x5expensive
Earnings1.06x5expensive
Relative1.12x5expensive
Growth0.62x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=18)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$63.020.38xyesFCF base $0.5B, growth 15% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection
DCF Exit MultipleGrowth$38.680.62xyesExit EV/EBITDA: 6.4x / 8.4x / 10.4x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$39.570.61xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.5x / 20.0x / 23.5x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$19.861.21xyesBV/sh $11.84, ROE (TTM) 15.5%, ke 9.3%
Two-Stage Excess ReturnAsset$25.410.94xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$23.451.02xyesRev $2.6B, growth 15% (input: historical growth; tapered), Terminal P/S: 1.6x / 1.9x / 2.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$21.361.12xyesEPS $1.78, growth 6% (input: historical EPS growth), PEG=2.29 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$19.521.23xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.44B × (1−17%) / WACC 9.2% → EPV (no growth)
Residual IncomeAsset$25.950.92xyesBV $11.84 + 5yr PV of (ROE (TTM) 15.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$21.771.10xyes√(22.5 × EPS $1.78 × BVPS $11.84) — Graham's conservative floor
EV/EBITDA RelativeRelative$36.930.65xyesEBITDA $0.59B × sector EV/EBITDA 13.0x
FCF YieldEarnings$24.570.98xyesFCF $466.3M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$22.611.06xyesSBC-adj FCF $0.43B (FCF $0.47B − SBC $0.04B) capitalized at Kₑ
Ben Graham FormulaEarnings$29.680.81xyesEPS $1.78 × (8.5 + 2×5.7%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$5.624.27xyesBV $11.84 × (ROIC 4.4% / WACC 9.2%)
P/Sales SectorRelative$18.681.28xyesRevenue $2.63B × sector P/S 1.5x
PEG Fair ValueRelative$15.211.58xyesEPS $1.78 × (PEG 1.5 × growth 5.7% (input: historical EPS growth)) → PE 8.5x
Earnings YieldEarnings$19.241.25xyesEPS $1.78 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net cash$171.2m
Net debt / NOPAT (after-tax)-0.43x (net cash)
Net debt / operating income (pre-tax)-0.36x (net cash)
Share count CAGR (buyback)-2.4%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Take the loudest bear worry first: Gentex sells into the global auto market, vehicle production is forecast to decline, and electric-vehicle programs are being delayed or canceled. That headwind is real, and yet the first quarter showed the company growing straight through it. Consolidated net sales rose 17% year over year to $675.4 million while its primary markets contracted about 2%, because Gentex is increasing the dollar value of content it puts in each vehicle even as the number of vehicles falls. The data undermines the simple cyclical-victim thesis: when the market shrank and Gentex still grew double digits, the growth was coming from content and mix, not from a rising tide. That is the difference between a commodity supplier and one with pricing power.

The economics behind that growth are high quality. Core Gentex gross margin improved 80 basis points to 34.0% in the quarter, driven by operational efficiency and favorable product mix toward higher-end items such as the Full Display Mirror and cabin-monitoring systems. The company's FY2025 10-K describes a portfolio spanning "digital vision, connected car, and other automotive products and electronics" that it develops and manufactures itself (FY2025 10-K, accession 0000355811-26-000010), which is what lets it hold a mid-30s gross margin in a cost-cutting industry. The VOXX International acquisition reached profitability in its first year, adding scale and a consumer-electronics adjacency that broadens the base beyond mirrors.

Gentex holds about $171 million of net cash against essentially no debt, so it funds research, capacity, and acquisitions internally and never depends on credit markets. It returns cash steadily, shrinking the share count at roughly 2% a year. With that structure, management raised its 2026 revenue outlook to $2.65 billion to $2.75 billion, held gross-margin guidance at 34% to 35%, and set a 2027 target of $2.80 billion to $2.90 billion.

Bear Case

The bear case has to start somewhere other than the balance sheet, because Gentex's balance sheet is its strongest asset: net cash, no meaningful debt, and self-funded operations leave essentially no financial-structure fragility. The fragility is on the demand side, and it is concentrated. Gentex is overwhelmingly an automotive supplier, so its fortunes track global vehicle production and the OEMs' willingness to keep specifying its features. When the cycle turns or automakers cut costs, a clean balance sheet does not protect revenue; it only protects solvency. The structural risk here is single-end-market exposure, and the price assumes that content growth keeps outrunning a shrinking vehicle market indefinitely.

The recent quarter shows where the pressure points are. Revenue in China fell about 29% quarter over quarter to roughly $28 million, reflecting tariffs and counter-tariff actions, and management flagged elevated costs for tariffs and for precious metals such as silver, gold, and ruthenium, plus petroleum-based materials and memory components where DRAM pricing has been a headwind. Primary markets declined about 2%, hurt by delayed and canceled EV programs and the removal of certain tax credits. These are not one-time items; they are the ongoing conditions of an industry that is simultaneously cutting features to lower sticker prices and producing fewer cars. A supplier whose growth depends on adding content faces a customer base actively trying to remove content.

The valuation leaves modest room for that to go wrong. The price already sits above the asset and earnings-power methods, which land in the high teens to mid twenties, so the cushion comes from the growth methods that assume content-per-vehicle keeps compounding. Analyst sentiment reflects the standoff: the consensus is neutral with a median target near $26.50, the stock carries no Sell ratings but also no strong conviction, and recent target cuts at Baird and B. Riley signal that some of the Street is trimming expectations as the production outlook softens. If vehicle production disappoints or a major program is decontented, the growth premium compresses toward the earnings-power methods, and the clean balance sheet, while reassuring, does nothing to stop that re-rating.

Valuation

Gentex is the rare case where the valuation families broadly agree the price is reasonable, and the agreement is the signal. The asset-based excess-return and residual-income methods land between about $20 and $26, with residual income landing almost exactly on the $25.95 price, anchored to a book value that the business earns a solid return on. The earnings-power methods, including a normalized EBIT value near $19.50 and an FCF capitalization near $24.57, sit just below the price. The relative and growth methods land higher: a peer-multiple method near $39.57, an exit-multiple DCF near $40.59, and a perpetual-growth DCF near $63. The central blended read is about $32.49, modestly above the current price.

The inverted view confirms the price is not a stretch. In plain terms, at today's price the market is asking only that Gentex hold roughly its current economics, not that it accelerate; the implied near-term operating pace is modest and consistent with what the company has recently delivered. That is the profile of a value-supported name rather than a growth bet.

The honest synthesis is that the downside and upside are framed by the same fact: content-per-vehicle growth against a shrinking auto market. If that content growth holds, the methods that land in the $38 to $50 range come into view, and the clean balance sheet and steady buybacks compound the return. If the auto cycle and tariff pressure overwhelm the content story, the price drifts toward the earnings-power methods in the low-to-mid twenties. The valuation is balanced, with a real asset and earnings floor underneath and a credible path higher, which is why so many of the methods cluster near the current price.

Catalysts

The near-term catalyst is the revenue and margin trajectory against the raised outlook: management lifted 2026 consolidated revenue guidance to $2.65 billion to $2.75 billion, held gross-margin guidance at 34% to 35%, and set a 2027 target of $2.80 billion to $2.90 billion, so each print is a test of whether content growth keeps outrunning soft vehicle production. Product adoption is the engine, with management citing good demand for higher-end items such as the Full Display Mirror and cabin-monitoring systems; new program wins and content-per-vehicle gains are the forward drivers. Tariffs are a two-sided catalyst: China revenue fell about 29% quarter over quarter to roughly $28 million on tariff and counter-tariff actions, and management is assessing potential tariff refunds, so policy developments move the model directly. Input costs are a watch item, with elevated prices for silver, gold, ruthenium, petroleum-based materials, and memory components pressuring margins. The VOXX integration is a smaller catalyst after the acquisition reached profitability in its first year, with further scaling underway. Sentiment is neutral, with a median target near $26.50, no Sell ratings, and recent target trims at Baird and B. Riley against a JP Morgan target of $28, so a clean beat on content growth would be needed to shift the consensus.

Sources: StockTitan Q1, Seeking Alpha outlook, Motley Fool transcript, Benzinga ratings

Peer Cohorts (Per Segment, With Filing Citations)

Automotive Products (reported)

Premium Audio Products (reported)

Other (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive GNTX report on boothcheck