Investors in Gentherm Incorporated (NASDAQ:THRM) had a good week, as its shares rose 3.0% to close at US$51.49 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$356m were what the analysts expected, Gentherm surprised by delivering a (statutory) profit of US$0.47 per share, an impressive 32% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Gentherm after the latest results.

Check out our latest analysis for Gentherm

Following the latest results, Gentherm's five analysts are now forecasting revenues of US$1.54b in 2024. This would be a credible 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 77% to US$2.65. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.55b and earnings per share (EPS) of US$2.66 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$69.20, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Gentherm, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$60.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Gentherm shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Gentherm's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.1% growth on an annualised basis. This is compared to a historical growth rate of 9.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Gentherm.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Gentherm's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Gentherm. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Gentherm going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Gentherm you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.