FMP
Gentherm Incorporated (NASDAQ:THRM) Financial Analysis
Feb 21, 2025 12:00 PM - Andrew Wynn
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- Gentherm's Return on Invested Capital (ROIC) is 8.36%, indicating it does not generate returns exceeding its cost of capital.
- Dorman Products, Inc. (NASDAQ:DORM) has a more favorable financial position with a ROIC of 12.08% and a ROIC/WACC ratio of 1.50.
- ExlService Holdings, Inc. (NASDAQ:EXLS) leads in capital efficiency with a ROIC of 13.67% and a ROIC/WACC ratio of 1.51.
Gentherm Incorporated (NASDAQ:THRM) is a global developer and marketer of innovative thermal management technologies. The company focuses on providing solutions for automotive, medical, and industrial markets. Gentherm's main competitors include Dorman Products, Inc. (DORM), Motorcar Parts of America, Inc. (MPAA), ExlService Holdings, Inc. (EXLS), Fox Factory Holding Corp. (FOXF), and Interface, Inc. (TILE).
In evaluating Gentherm's financial performance, the Return on Invested Capital (ROIC) is a key metric. Gentherm's ROIC stands at 8.36%, which is lower than its Weighted Average Cost of Capital (WACC) of 11.58%. This results in a ROIC/WACC ratio of 0.72, indicating that Gentherm is not generating returns that exceed its cost of capital.
Comparatively, Dorman Products, Inc. (NASDAQ:DORM) shows a more favorable financial position with a ROIC of 12.08% and a WACC of 8.06%. This results in a ROIC/WACC ratio of 1.50, suggesting that DORM is efficiently generating returns above its cost of capital, unlike Gentherm.
ExlService Holdings, Inc. (NASDAQ:EXLS) leads the peer group with a ROIC of 13.67% and a WACC of 9.05%, resulting in a ROIC/WACC ratio of 1.51. This indicates that EXLS is the most efficient in generating returns over its cost of capital among the companies analyzed, highlighting its strong capital efficiency.
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