Gentex's (GNTX) long-term growth strategy is taking shape, though near-term margin choppiness means investors will want to see more progress before valuing the stock more highly, UBS Securities said Thursday in a report.

UBS said Gentex's analyst day showed the company is shifting from relying on its core auto-dimming mirror business to driving growth through new technologies and adjacent product categories. Long-term targets are "plausible," though several initiatives, including dimmable visors, large-area devices and contract manufacturing will take time to scale, the report said.

Gentex's 10-year plan targets 8% annual revenue growth, with sales projected to reach $4.5 billion to $7.1 billion by 2036, the report said.

In the nearer term, UBS highlighted margin uncertainty in 2027, citing electronics cost inflation, lower mirror volumes, the full-year impact of lost Volkswagen business and ongoing share pressure in China. While a better product mix from full-display mirrors and driver-monitoring systems should help, investors will likely wait for clearer progress in these growth drivers, the report said.

UBS maintained its neutral rating on Gentex stock with a $25 price target.

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