Gentherm (NASDAQ:THRM) vs. BRP (NASDAQ:DOOO) Critical Comparison

BRP (NASDAQ:DOOO) and Gentherm (NASDAQ:THRM) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Risk & Volatility

BRP has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Profitability

This table compares BRP and Gentherm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRP	0.45%	67.30%	4.72%
Gentherm	1.22%	10.07%	5.11%

Earnings and Valuation

This table compares BRP and Gentherm”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRP	$8.03 billion	0.60	-$154.60 million	$0.37	179.05
Gentherm	$1.50 billion	0.56	$18.28 million	$0.61	45.36

Gentherm has lower revenue, but higher earnings than BRP. Gentherm is trading at a lower price-to-earnings ratio than BRP, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for BRP and Gentherm, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRP	0	5	8	2	2.80
Gentherm	1	4	2	0	2.14

BRP currently has a consensus price target of $84.40, indicating a potential upside of 27.40%. Gentherm has a consensus price target of $39.40, indicating a potential upside of 42.39%. Given Gentherm’s higher probable upside, analysts clearly believe Gentherm is more favorable than BRP.

Insider and Institutional Ownership

97.1% of Gentherm shares are owned by institutional investors. 1.4% of Gentherm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Gentherm beats BRP on 8 of the 15 factors compared between the two stocks.

About BRP

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally. The Powersports segment offers year-round products, such as Can-Am all-terrain vehicles, side-by-side vehicles, and three-wheeled vehicles; and seasonal products, including Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercrafts and pontoons, Rotax engines for karts and recreational aircraft, and Pinion gearboxes with smart shift systems. The Marine segment provides Alumacraft, Manitou, Quintrex, Stacer, and Yellowfin boats; Rotax engines for jet boats; and Rotax S outboard engine. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.

About Gentherm

Gentherm Incorporated designs, develops, manufactures, and sells thermal management and pneumatic comfort technologies in the United States and internationally. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units; and other climate comfort systems, including neck and shoulder conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries; thermal management products for heating and cooling; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. In addition, it offers lumbar and massage comfort solutions, such as lumbar support, side bolster adjustment, multi-contour seats, and massage systems; automotive cable systems, including ready-made individual cables, and ready-to-install cable networks; and valve systems products consisting of applications that offer solutions in fuel management, and other valves for brake and engine systems. This segment serves light vehicle original equipment manufacturers and tier 1s, such as automotive seat manufacturers, and aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.