Gentherm Q2 adjusted EBITDA beats estimates, sets $400 million buyback
THRM•Drivers in the quarter
- Automotive growth - Automotive Climate and Comfort Solutions revenue rose 14.1% year over year, outperforming relevant market vehicle production by 14 percentage points.
- Higher material costs - Gross margin declined to 23.2% from 23.9% due to higher material costs and increased warranty accruals, partially offset by operating leverage.
- New business and market expansion - The company secured $690 million in new automotive business awards and expanded into home, office, and medical markets.
Analyst coverage and valuation
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell".
The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy".
Wall Street's median 12-month price target for Gentherm Inc is $41.50, about 15.1% above its July 22 closing price of $36.05. The stock recently traded at 12 times the next 12-month earnings versus a P/E of 10 three months ago.
Buyback authorization and outlook
The company authorized a new $400 million stock repurchase program.
Gentherm raised its 2026 product revenue guidance to $1.55 billion–$1.65 billion. It now sees 2026 adjusted EBITDA at $185 million–$200 million and expects 2026 adjusted free cash flow of $85 million–$100 million.
