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Strength Seen in Gentherm (THRM): Can Its 5.7% Jump Turn into More Strength?

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Gentherm (THRM - Free Report) shares rallied 5.7% in the last trading session to close at $73.45. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.3% loss over the past four weeks.

Robust demand for the company’s new technologies and flagship offerings is enabling Gentherm to clinch numerous contracts, thereby buoying investors’ confidence in the stock. 

Gentherm offers heated seating, climate seating, electronics and cables for the automotive market and is developing thermoelectric generators for converting heat into electricity for applications in automotive, industrial and materials sectors.

The firm’s innovative launches in battery thermal management, comfort solutions, hands-on detection-enabled steering wheel heaters and other electronics are set to further boost the firm’s automotive segment’s prospects. Increasing demand for key products like Blanketrol and Hemotherm is likely to bolster revenues from the medical segment. As such, we expect the stock to have significant upside potential.

Price and Consensus

Price Consensus Chart for THRM

This maker of climate-controlled seats and other products is expected to post quarterly earnings of $0.57 per share in its upcoming report, which represents a year-over-year change of +11.8%. Revenues are expected to be $251.36 million, up 10% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Gentherm, the consensus EPS estimate for the quarter has been revised 6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on THRM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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