Roth MKM Maintains Buy Rating for Gentherm with $42 Price Target

Roth MKM maintains a Buy rating for Gentherm (THRM) with a price target of $42.00. The firm's shares closed at $32.87. Matt Koranda, the analyst, covers the Consumer Cyclical sector and has a 39.90% success rate on recommended stocks. Gentherm also received a Buy from Craig-Hallum's Ryan Sigdahl, but Robert W. Baird maintained a Hold rating. Corporate insider sentiment is positive, with 61 insiders buying shares over the past quarter.

Gentherm (NASDAQ: THRM), a leading provider of thermal management and pneumatic comfort technologies, recently released its second-quarter 2025 financial results. The company reported revenue of $375.1 million, a slight decrease of 0.2% year-over-year. Despite flat revenue, Gentherm secured $620 million in new automotive business awards during the quarter, bringing the year-to-date total to over $1 billion [1].

Key financial metrics for the quarter include a gross margin decrease to 23.9% from 25.7%, net income of $0.5 million (down from $18.9 million), and adjusted EBITDA of $45.9 million (12.2% of revenue). The company narrowed its 2025 guidance, projecting revenue between $1.43B-$1.5B and adjusted EBITDA margin of 11.7%-12.5%. Gentherm delivered mixed Q2 results with flat revenue but declining margins; narrowed guidance suggests cautious optimism amid challenging market conditions [1].

Notably, Gentherm's Automotive Climate and Comfort Solutions segment grew by 3.8%, outperforming broader industry production by 10 basis points in relevant markets. This segment showed strength in North America and Europe despite weakness in Asia. However, the company experienced substantial margin compression, primarily due to higher material costs, unfavorable product mix, and increased labor expenses. This contributed to a significant decline in net income from $18.9 million to just $0.5 million, though this was heavily impacted by $18.9 million in unrealized foreign currency losses. Adjusted EBITDA fell to $45.9 million (12.2% of revenue) from $49.9 million (13.3%) [1].

The commercial pipeline appears strong, with $620 million in new automotive business awards in Q2 alone, bringing the year-to-date total to over $1 billion. Key wins include Ford's next-generation F-Series truck platform and multiple awards for their innovative Puls.A™ massage solution, suggesting solid future revenue potential [1].

Management's revised guidance reflects both confidence and caution. They narrowed the full-year revenue range to $1.43-1.5 billion (raising the lower end) while tightening the adjusted EBITDA margin range to 11.7-12.5% (both lowering the top end and raising the bottom). The reduced capital expenditure forecast ($55-65 million from $70-80 million) suggests a more conservative approach to growth investments. The company maintained strong financial flexibility with net leverage at approximately 0.5x and increased liquidity to $416 million, while continuing shareholder returns through $10 million in share repurchases during the quarter. This balanced approach to capital allocation provides stability during uncertain market conditions [1].

Analysts have mixed opinions on Gentherm's stock. Roth MKM maintains a Buy rating with a price target of $42.00, while Craig-Hallum's Ryan Sigdahl also recommends a Buy. However, Robert W. Baird maintained a Hold rating. Corporate insider sentiment is positive, with 61 insiders buying shares over the past quarter [2].

References:
[1] https://www.stocktitan.net/news/THRM/gentherm-reports-2025-second-quarter-76rzizjmxfxo.html
[2] (No specific URL provided for the analyst ratings and insider sentiment)