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How Did Gentex Corporation Perform in 4Q16?

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Price movement

Gentex Corporation (GNTX) has a market cap of $6.0 billion. It fell 2.0% to close at $21.23 per share on January 27, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.1%, 5.9%, and 8.3%, respectively, on the same day.

GNTX is trading 2.7% above its 20-day moving average, 7.9% above its 50-day moving average, and 22.3% above its 200-day moving average.

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Related ETF and peers

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 0.40% of its holdings in Gentex. The YTD price movement of IVOG was 2.7% on January 27.

The market caps of Gentex’s competitors are as follows:

  • Cintas Corporation (CTAS) — $12.3 billion
  • Autoliv (ALV) — $10.1 billion
  • Lear Corporation (LEA) — $9.9 billion

Performance of Gentex in 4Q16

Gentex (GNTX) reported 4Q16 net sales of $419.9 million, a rise of 3.5% compared to net sales of $405.6 million in 4Q15. The company’s gross profit margin expanded 10 basis points and its operating margin narrowed 70 basis points in 4Q16 compared to 4Q15. This increase in gross margin was due to higher advanced feature shipments and a fall in purchasing costs. However, this rise was offset by a fall in raw material and sales, as well as in the annual consumer price.

Its net income and EPS (earnings per share) rose to $88.8 million and $0.31, respectively, in 4Q16 compared to $88.4 million and $0.30, respectively, in 4Q15.

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Fiscal 2016 results

In 2016, GNTX reported net sales of $1.7 billion, a rise of 8.8% YoY (year-over-year). The company’s gross margin and operating margin expanded 70 basis points and 80 basis points, respectively, in 2016.

Its net income and EPS rose to $347.6 million and $1.19, respectively, in 2016 compared to $318.5 million and $1.08, respectively, in 2015.

Gentex’s cash and short-term investments rose 30.1% in 2016. Its current ratio rose to 7.7x in 2016 compared to 7.5x in 2015.

Projections

Gentex made the following projections for fiscal 2017:

  • net sales in the range of $1.78 billion–$1.85 billion
  • gross margin in the range of 39.0%–40.0%
  • tax rate in the range of 31.5%–32.5%
  • capital expenditures in the range of $115 million–$130 million

It expects revenue growth in the range of 6%–10% for fiscal 2018.

In the next part, we’ll look at WestRock Company (WRK).

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