Group 1 - The article emphasizes a long-term investment strategy focused on companies with strong fundamentals that are currently undervalued due to short-term challenges [1] - The market is perceived to be overly concerned with short-term issues, leading to mispricing of quality companies, which presents investment opportunities [1] - The goal is to identify these short-term mispricings to unlock long-term value for investors [1]

Company Overview - Gentex Corporation, founded in 1974, is a leading supplier in various sectors including digital vision, connected car technologies, dimmable glass, fire protection technologies, medical devices, and consumer electronics [2] Dividend Announcement - The Board of Directors of Gentex Corporation declared a quarterly cash dividend of $0.12 per share, which will be payable on July 23, 2025, to shareholders of record as of July 9, 2025 [1]

Core Insights - The article reflects on the author's journey into value investing, sparked by dissatisfaction with mutual fund performance and a desire to learn about capital allocation [1]. Company Analysis - Gentex Corporation (NASDAQ: GNTX) was previously trading in the range of $20 to $22, indicating a potential area of interest for value investors [1].

Financial Performance - Net sales for Q1 2025 were $576.8 million, a decrease of 2% compared to $590.2 million in Q1 2024[102]. - Automotive net sales in Q1 2025 were $563.9 million, down 2% from $577.6 million in Q1 2024, with a 7% decrease in auto-dimming mirror unit shipments to 11.5 million units[81]. - Net income for Q1 2025 was $94.9 million, down from $108.2 million in Q1 2024, with earnings per diluted share decreasing to $0.42 from $0.47[90]. - Cash flow from operating activities increased by $18.6 million to $148.5 million in Q1 2025 compared to $129.9 million in the same period last year[95]. Expenses and Costs - Cost of goods sold as a percentage of net sales increased to 66.8% in Q1 2025 from 65.7% in Q1 2024, primarily due to lower sales levels and new tariff costs[84]. - Total operating expenses rose by 8% to $78.7 million in Q1 2025, influenced by a $2.9 million severance expense[85]. - Engineering, research, and development expenses increased by $3.7 million in Q1 2025, primarily due to staffing and professional fees[86]. Market and Production Insights - The light vehicle production forecast for Q2 2025 is 18.18 million units, a 2% decrease from Q2 2024[122]. - The Company expects light vehicle production in North America to decrease by 10% in Q2 2025 compared to Q2 2024[122]. - The Company has halted production of mirrors for the China market due to tariff escalations, leading to canceled or paused orders from customers[121]. Strategic Initiatives - The company reported 21 net new nameplate launches of auto-dimming mirrors in Q1 2025, with advanced feature launches making up 60% of these[103]. - The Company launched the Gentex ReVu app in Q1 2025, allowing users to download images or recordings from the Full Display Mirror with DVR capability[109]. - The Company expanded its distribution center by 300,000 square feet at a cost of approximately $40 million, funded with cash and cash equivalents[97]. - The Company closed the strategic merger with VOXX, expecting to add between $325 and $375 million in annualized revenue[127]. Revenue Projections - Revenue in North America, Europe, and Japan/Korea is expected to be between $2.1 and $2.2 billion[125]. - Revenue in the China market is expected to be between $50 and $120 million[125]. - Expected revenue contribution from the VOXX merger for calendar year 2025 is approximately $240 to $280 million[127]. - The Company has withdrawn revenue guidance for calendar year 2026 due to significant uncertainty surrounding the China market[124]. Shareholder Actions - The company has a share repurchase plan, having repurchased 3,100,351 shares in Q1 2025, with 6,349,047 shares remaining under the plan[101]. - The Company has 6.3 million shares remaining available for repurchase under the share repurchase plan[126]. Future Expectations - Gross Margin is expected to be between 33% and 34%[125]. - Operating Expenses are expected to be approximately $300 to $310 million[125]. - Capital Expenditures are expected to be between $100 and $125 million[125]. - Estimated Annual Tax Rate is expected to be between 15% and 17%[125].

Core Viewpoint - Gentex Corporation (GNTX) reported a decline in adjusted earnings per share (EPS) and net sales for the first quarter of 2025, indicating challenges in the automotive products market and an unfavorable product mix [1][2]. Financial Performance - GNTX's adjusted EPS for Q1 2025 was 43 cents, matching the Zacks Consensus Estimate but down 8.5% year over year [1]. - The company reported net sales of $576.8 million, missing the Zacks Consensus Estimate of $587 million and decreasing by 2.3% from the previous year [2]. - Gross margin fell to 33.2%, a decline of 110 basis points from Q1 2024, attributed to lower sales, an unfavorable product mix, and new tariff costs [2]. Segmental Performance - The Automotive segment, which is the largest revenue contributor, had net sales of $563.9 million, down from $577.6 million year over year and below the estimate of $570.4 million [3]. - Auto-dimming mirror shipments in North America decreased by 7% to 3,619,000 units, while international shipments fell by 8% to 7,923,000 units, leading to a total shipment decline of 7% to 11,542,000 units [3]. Other Sales and Products - Other net sales, including dimmable aircraft windows and fire protection products, increased slightly from $12.6 million to $12.9 million but were below the estimate of $15.2 million [4]. - Fire protection sales decreased by 1.5% year over year, and dimmable aircraft window sales fell by 15.5% year over year [4]. Operating Expenses - Total operating expenses rose by 8% year over year to $78.7 million in Q1 2025 [5]. - Engineering and R&D expenses increased to $45.92 million from $42.18 million in the same quarter of 2024, while SG&A expenses decreased to $29.93 million from $30.71 million [5]. Shareholder Returns and Cash Position - GNTX paid a dividend of 12 cents per share and repurchased 3.1 million shares at an average price of $24.52 per share [6]. - As of March 31, 2025, the company had approximately $286.6 million in cash and cash equivalents [6]. 2025 Guidance - GNTX revised its 2025 sales guidance to a range of $2.10-$2.2 billion for the primary market and $50-$120 million for the Chinese market, highlighting exposure to tariffs [6]. - The gross margin is projected to be between 33-34%, down from the previous guidance of 33.5-34.5% [7]. - Capital expenditure is anticipated to be between $100 million and $125 million, and operating expenses are estimated to be in the range of $300-$310 million [7].

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Company Performance - Gentex reported quarterly earnings of $0.43 per share, matching the Zacks Consensus Estimate, but down from $0.47 per share a year ago [1] - The company posted revenues of $576.77 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.74% and down from $590.23 million year-over-year [2] - Over the last four quarters, Gentex has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates [2] Stock Movement and Outlook - Gentex shares have declined approximately 23.5% since the beginning of the year, compared to a 6.8% decline in the S&P 500 [3] - The future performance of Gentex's stock will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $586.76 million, and for the current fiscal year, it is $1.87 on revenues of $2.39 billion [7] Industry Context - The Automotive - Original Equipment industry, to which Gentex belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Gentex's stock performance [5][6]

consumer electronics, today reported financial results for the three months ended March 31, 2025. 1st Quarter 2025 Summary Exhibit 99.1 GENTEX REPORTS FIRST QUARTER 2025 FINANCIAL RESULTS ZEELAND, MI -- (GLOBE NEWSWIRE - April 25, 2025) - Gentex Corporation (NASDAQ: GNTX), a leading supplier of digital vision, connected car, dimmable glass, fire protection technologies, medical devices, and For the first quarter of 2025, the Company reported net sales of $576.8 million, compared to net sales of $590.2 milli ...

Financial Performance - For Q1 2025, the company reported net sales of $576.8 million, a decrease of 2% compared to $590.2 million in Q1 2024 [3][8] - Gross margin for Q1 2025 was 33.2%, down from 34.3% in Q1 2024, but improved by 70 basis points from Q4 2024 [4][8] - Operating income for Q1 2025 was $113.0 million, compared to $129.3 million in Q1 2024 [6][8] - Net income for Q1 2025 was $94.9 million, down from $108.2 million in Q1 2024, with earnings per diluted share at $0.42, a decrease of 11% from $0.47 in Q1 2024 [8][9] Market Conditions - Global light vehicle production increased by approximately 1% year-over-year but decreased by 3% quarter-over-quarter in primary markets [3] - The company experienced a shortfall of expected sales of approximately $25 - $30 million due to a weaker trim-mix in light vehicle production [3] Operating Expenses - Operating expenses rose by 8% to $78.7 million in Q1 2025, influenced by severance expenses of $2.9 million and one-time merger-related costs of $0.9 million [5][8] - Core operating expense growth was less than 3% for the quarter, excluding severance and merger-related expenses [5] Future Guidance - The company revised its revenue guidance for 2025 to $2.10 - $2.20 billion, down from the previous estimate of $2.40 - $2.45 billion, due to tariff impacts [18] - Light vehicle production in primary markets is expected to decline approximately 5% in 2025 compared to 2024, with a forecasted decrease of about 11% in the last three quarters of 2025 [15][16] Share Repurchases - During Q1 2025, the company repurchased 3.1 million shares at an average price of $24.52 per share, with approximately 6.3 million shares remaining available for repurchase [12]

It is projected by analysts that the 'Revenue- Automotive Products' will reach $568.61 million. The estimate points to a change of -1.6% from the year-ago quarter. The combined assessment of analysts suggests that 'Auto-Dimming Mirror Shipments - Total Interior Mirrors' will likely reach 7.59 million. The estimate compares to the year-ago value of 7.82 million. Analysts forecast 'Auto-Dimming Mirror Shipments - Total Exterior Mirrors' to reach 4.42 million. The estimate is in contrast to the year-ago figure ...