Critical Analysis: Gentex (NASDAQ:GNTX) versus WeRide (NASDAQ:WRD)

Gentex (NASDAQ:GNTX) and WeRide (NASDAQ:WRD) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Volatility and Risk

Gentex has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, WeRide has a beta of 4.32, meaning that its stock price is 332% more volatile than the S&P 500.

Institutional and Insider Ownership

86.8% of Gentex shares are owned by institutional investors. 0.5% of Gentex shares are owned by company insiders. Comparatively, 2.7% of WeRide shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Gentex and WeRide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gentex	$2.53 billion	2.15	$384.84 million	$1.74	14.30
WeRide	$511.42 million	4.79	-$350.09 million	($0.84)	-9.01

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

Profitability

This table compares Gentex and WeRide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gentex	15.19%	16.05%	13.85%
WeRide	-329.54%	-24.31%	-22.06%

Analyst Ratings

This is a breakdown of recent ratings for Gentex and WeRide, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gentex	0	6	2	0	2.25
WeRide	1	0	4	1	2.83

Gentex presently has a consensus price target of $26.71, indicating a potential upside of 7.33%. WeRide has a consensus price target of $13.13, indicating a potential upside of 73.38%. Given WeRide’s stronger consensus rating and higher probable upside, analysts plainly believe WeRide is more favorable than Gentex.

Summary

Gentex beats WeRide on 8 of the 15 factors compared between the two stocks.

About Gentex

Gentex Corporation designs, develops, manufactures, markets, and supplies digital vision, connected car, dimmable glass, and fire protection products in the United States, Germany, Japan, Mexico, Republic of Korea, and internationally. It operates through Automotive Products and Other segments. The company offers automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, automotive suppliers, and various aftermarket and accessory customers. It also provides variable dimmable windows to aircraft manufacturers and airline operators. In addition, the company offers photoelectric smoke detectors and alarms, electrochemical carbon monoxide alarms and detectors, audible and visual signaling alarms, and bells and speakers used in fire detection systems in office buildings, hotels, and other commercial and residential buildings, as well as researches and develops nanofiber chemical sensing products. It sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. Gentex Corporation was incorporated in 1974 and is headquartered in Zeeland, Michigan.

About WeRide

WeRide, Inc. engages in the development of an autonomous driving technology platform. It offers Robotaxi, Robobus, Robovan, Robosweeper, and advanced driving solutions, providing smart services in online ride-hailing, on-demand transport, urban logistics, and environmental sanitation. The company was founded by Tony Xu Han and Yan Li in February 2017 and is headquartered in Guangzhou, China.