Gentex Earnings: Easing Supply Chain Woes a Huge Profit Booster While Vendor Battle Begins

Gentex's third-quarter showed efforts to improve gross margin are paying off as volumes recover and give us no reason to change our fair value estimate. We believe the stock's 7.4% selloff on Oct. 27 is not warranted and was probably exacerbated by the Dow Jones Industrial Average's nearly 400-point decline that day or heavy selling in GM and Ford. Diluted EPS of $0.45 rose by 45.2% year over year and beat the $0.44 Refinitiv consensus, while unit volumes and revenue growth rates once again easily outgrew industry light vehicle production by 500 and 1,200 basis points, respectively. Management confirmed guidance for 2024 revenue of $2.45 billion to $2.55 billion and kept 2023 revenue and gross margin guidance in place.