Gentherm Incorporated (THRM), a global market leader in innovative thermal management and pneumatic comfort technologies, recently announced its solid fourth quarter and full-year 2024 financial results. The company's innovative technology solutions and offerings allow it to maintain a competitive edge among its peers and operational efficiency.
The company’s innovative products and solutions include Climate and comfort solutions, Electronics & cables, Battery performance solutions, patient temperature management, and Blood & fluid temperature control.
In the fourth quarter alone, the company secured new automotive business awards of around $640 million, totaling $2.40 billion in the full year 2024. Revenue from the medical segment increased by 8.4% year-over-year to $14.08 million, and Lumbar and Massage Comfort Solutions revenue scored the higher growth of 28.8% from the prior year’s quarter to $45.49 million.
Further, the surging demand for electric vehicles in the market is propelling the company's growth avenues. Reuters projects that global sales of fully electric and plug-in hybrid vehicles will surge by over 17% in 2025 to reach over 20 million cars, fueled by the extension of China's auto trade-in subsidies.
Also, the U.S. electric vehicles market is projected to reach a revenue of $104.70 billion in 2025. The market is further expected to expand at a CAGR of 10.5%, resulting in a market value of $156.30 billion by 2029. The US market is currently observing a significant surge in the demand for EVs due to supportive government incentives and increasing environmental consciousness among consumers.
Shares of THRM have gained marginally from the last session to close at $33.45.
Let’s look at factors that could influence THRM’s performance in the upcoming months.
Robust Financials
THRM reported product revenues of $352.91 million during the fourth quarter that ended December 31, 2024, and its gross margin came in at $86.10 million for the same period. The company’s adjusted EBITDA for the quarter stood at $41.37 million.
In addition, the company’s adjusted net income and adjusted EPS amounted to $9.09 million and $0.29 for the quarter, respectively. Also, the company’s cash and cash equivalents and total assets stood at $134.13 million and $1.25 billion as of December 31, 2024.
Solid Historical Growth
THRM’s revenue and EBITDA have grown at respective CAGRs of 11.7% and 3.5% over the past three years. The company’s EBIT has increased 1% over the same timeframe, while its normalized net income and total assets have improved at marginal and 10.1% CAGRs, respectively.
Favorable Analyst Estimates
Analysts expect THRM’s revenue for the third quarter (ending September 2025) to increase marginally year-over-year to $373.15 million, and the consensus EPS estimate is $0.67 for the same quarter. Further, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
In addition, for the fiscal year ending December 2026, the company’s revenue and EPS are anticipated to improve 4.9% and 32.2% from the prior year to $1.52 billion and $3.12, respectively.
High Profitability
THRM’s trailing-12-month EBIT margin and net income margin of 8.42% and 4.46% are higher than the respective industry averages of 8.14% and 4.29%. Its trailing-12-month ROTC of 8.64% is 38.9% higher than the industry average of 6.22%.
Furthermore, the stock’s trailing-12-month ROTA of 5.21% favorably compares to the industry average of 3.88%. Also, its trailing-12-month CAPEX/Sales of 5.03% is 73.2% higher than the industry average of 2.91%.
POWR Ratings Reflect Promise
THRM’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. THRM has a B grade for Quality, consistent with its higher-than-industry profitability.
THRM is ranked #20 in the 60-stock A-rated Auto Parts industry.
Beyond what I have stated above, we have also given THRM grades for Sentiment, Value, Momentum, Growth, and Stability. Get access to all the THRM ratings here.
Bottom Line
The growing reliance on electric vehicles is rapidly driving the EV market owing to its fuel-efficient and cost-efficient features. Amid this, THRM's operations are benefiting exponentially. The company's innovative technologies are meeting the rising demands of the EV market, positioning it for long-term growth.
Thus, with solid financials, accelerating profitability, and long-term market prosperity, this auto parts stock could be a suitable match for your investment portfolio.
How Does Gentherm Incorporated (THRM) Stack Up Against Its Peers?
While THRM has an overall POWR Rating of B, investors could also check out these other stocks within the A-rated Auto Parts industry with A (Strong Buy) or B (Buy) ratings: Denso Corp. ADR (DNZOY), Continental AG ADR (CTTAY), and STRATTEC SECURITY CORPORATION (STRT).
For exploring more A and B-rated auto parts stocks, click here.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
THRM shares were trading at $32.95 per share on Friday afternoon, down $0.50 (-1.49%). Year-to-date, THRM has declined -17.47%, versus a 2.49% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
Is Gentherm Inc. (THRM) a Smart Buy Amidst the Growing Electric Vehicle Market? StockNews.com
