THRM Should I Buy
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Gentherm Inc (THRM) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company has positive catalysts such as its planned merger and revenue growth projections, the technical indicators are bearish, hedge funds are selling heavily, and financial performance shows significant declines in net income and EPS. Considering the user's impatience and unwillingness to wait for optimal entry points, it is better to hold off on investing until clearer signs of recovery or upward momentum are evident.
The technical indicators for THRM are bearish. The MACD is below 0 and negatively contracting, the RSI is neutral at 34.375, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level (S1: 30.384), with resistance at R1: 32.954.
Q4 revenue exceeded expectations, and the company is benefiting from rising electric vehicle penetration and demand for energy-efficient features.
Hedge funds are selling heavily, with an 8556.93% increase in selling over the last quarter. Financial performance shows a significant decline in net income (-80.50% YoY) and EPS (-79.59% YoY). Gross margin also dropped by 2.79% YoY. Technical indicators suggest bearish momentum, and there is no recent congress trading data to support confidence in the stock.
In Q4 2025, revenue increased by 8.46% YoY to $382.8 million, but net income dropped by 80.50% YoY to $2.99 million. EPS fell by 79.59% YoY to 0.1, and gross margin declined to 23.72%, down 2.79% YoY.
Freedom Capital initiated coverage with a Buy rating and a $41 price target, citing Gentherm's leading position in automotive thermal management and the benefits of rising electric vehicle penetration. However, the stock's current price of $31.31 is significantly below the target, and the bearish technicals and financial performance detract from the rating's optimism.
