Is Gentherm, Inc. overvalued or undervalued?

As of 17 October 2025, Gentherm, Inc. has moved from a fair to a very expensive valuation grade. The company appears overvalued based on its current metrics, with a P/E ratio of 12, a Price to Book Value of 1.29, and an EV to EBITDA of 5.36. In comparison to peers, Gentherm's P/E ratio of 25.79 is notably higher than Donaldson Co., Inc. at 28.15 and significantly lower than Allison Transmission Holdings, Inc. at 9.98, indicating a premium valuation relative to some competitors.
The company's recent performance has been underwhelming, with a year-to-date return of -14.51%, contrasting sharply with the S&P 500's gain of 13.30% over the same period. This trend continues over longer time frames, with Gentherm's 3-year return at -38.6% compared to the S&P 500's impressive 81.19%. Overall, these factors suggest that Gentherm, Inc. is overvalued in the current market environment.