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Gentex Corporation (GNTX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Gentex Corporation (GNTX)

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Intrinsic Value (DCF)

Current$24.30
→
Intrinsic$29.41
+21%
$20.45$29.41$46.46
Market implies 3% growth for 5 years
GNTX shows 21% potential upside using 8% growth — reasonable if fundamentals hold.
At $24, the market prices in only 3% growth — below historical 8%, suggesting low expectations.
Range: Bear $20 → Bull $46. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →4%6%8%10%
8%$35$38$41$45
10%$25$27$29$32
12%$20$21$23$25
14%$16$18$19$20

Bull Case

  • Bull case ($46) offers 91% upside at 10% growth, 9% discount
  • 17% margin of safety vs. base case estimate
  • Market-implied growth (3%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($20) implies 16% downside at 6% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$381.83M
Year 2$412.37M
Year 3$445.36M
Year 4$480.99M
Year 5$519.47M
Terminal$7.64B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$353.54MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is GNTX stock undervalued or overvalued?
🟢 UNDERVALUED

GNTX trades at $24.30 vs. our DCF-derived intrinsic value of $29.41, implying +20% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of GNTX's future cash flows. The bear case ($21.59) still suggests upside, providing margin of safety.

What is GNTX's intrinsic value?

Using a 5-year DCF model: Base FCF of $354M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-229M net debt and dividing by 0.23B shares: Bear $21.59 | Base $29.41 | Bull $39.88. Current price $24.30 implies +20% to base case.

How is GNTX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($6.42B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.