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Growth & Income

Gentex Corporation (GNTX - Snapshot Report) recently reported record results for the first quarter, beating analyst estimates. That was fourth consecutive that Gentex has beaten the Zacks Consensus Estimate. In those quarters, the average beat was by 38.4%.

Gentex is a Zacks #2 Rank stock. It trades at 23x 2010 consensus estimates and 19x consensus estimates for 2011.

Growth and Income

Analysts estimate that Gentex will generate EPS growth of 90.8% in 2010, 19.8% in 2011, and 16.0% per year for the long-term. In addition, GNTX shares have a dividend yield of 2.1%.


Gentex designs, develops, manufactures, and markets automatic-dimming rearview automotive mirrors with electronic features, and fire protection products using electro-optic technology.

Record First-Quarter Results

On April 22, Gentex announced record net sales of $185.8 million, an increase of 98% from the year-ago quarter. The company earned $0.23 per share, compared to a loss of $0.01 in Q1 2009. More important, Gentex topped the Zacks Consensus by 2 cents, or 9.5%.

In the first quarter, the company's gross profit margin jumped 1,310 basis points to 36.9% from 23.8% in the first quarter of 2009. The increase was due Gentex leveraging fixed overhead costs over its record revenue growth.

Second-Quarter Outlook

For the second quarter, management expects year-over-year sales growth of 55%-65% with a gross margin in-line with the first quarter.

Estimates Moving Higher

Analysts covering the stock increased their estimates after the company reported record first-quarter results.

In the last 30 days, the Zacks Consensus for 2010 climbed 7 cents, or 8.4%, to $0.90, and the Zacks Consensus for 2011 increased by 6 cents, or 5.9%, to $1.07.

The Chart

After experiencing a sharp 26% pullback last summer, GNTX bottomed right at its 200-day moving average on July 8. 2009. In the last 10 months, GNTX shares have more than doubled, reaching a 52-week high of $23.99. The stock has sold off in the last few weeks, due to the market's increasing volatility. GNTX is now about 10% off its highs.

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