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Garmin (GRMN)
NYSE:GRMN
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Garmin
(NYSE:GRMN)
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Rating:84Outperform
Price Target:
$278.00
▲(11.69% Upside)
Action:ReiteratedDate:02/19/26
GRMN scores well primarily on high-quality financial performance (strong profitability, minimal leverage, solid and improving cash generation) and supportive technical momentum (price above key moving averages with positive MACD). The main offset is valuation, where a ~25x P/E and modest yield reduce attractiveness, while the latest earnings call adds confidence via upbeat 2026 growth guidance and enhanced shareholder returns despite manageable cost and inventory risks.
Positive Factors
Balance Sheet Health
Garmin's very conservative balance sheet with minimal debt and growing equity provides durable financial flexibility. Low leverage supports ongoing dividends, buybacks, elevated capex for capacity expansion, and cushions operations against cyclical downturns or rising interest rates without risking solvency.
Cash Generation
Strong operating cash flow and roughly $1.4B of free cash flow, plus a sizable cash stake, underpin Garmin's capital allocation flexibility. Reliable cash generation funds the 17% dividend increase, $500M buyback, and higher capex for a new Thailand facility while avoiding material new leverage.
Segment Diversification & Margins
Garmin's diversified portfolio across fitness, outdoor, aviation, marine and auto OEM combines high-margin avionics/marine businesses with rapid fitness growth. Wide segment mix and industry-specific leadership sustain pricing power, reduce company-level cyclicality, and support durable operating margins and cash flows.
Negative Factors
Auto OEM Weakness
Auto OEM generated an operating loss and faces declining revenue as legacy programs end and BMW volumes peak. Structural program timing and OEM platform cycles can create prolonged revenue gaps, require retooling or new program wins, and pressure consolidated margins until replacement programs ramp.
Input Cost & Tariffs
Sustained memory cost inflation and elevated tariff exposure raise product costs and compress gross margins. Management expects only partial offsets from mix and supply actions, so structural cost headwinds could persist for months, requiring pricing power or margin tradeoffs to preserve profitability.
Elevated Working Capital
A sizable inventory build and higher receivables increase working capital needs, tying up cash and raising execution risk if demand softens. Elevated inventories can lead to markdowns or slower cash conversion, limiting free cash flow flexibility even with a strong headline cash balance.
Garmin (GRMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$45.67B
Dividend Yield1.7%
Average Volume (3M)1.05M
Price to Earnings (P/E)27.6
Beta (1Y)0.92
Revenue Growth16.56%
EPS Growth3.19%
CountryUS
Employees21,800
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)2.79
Shares Outstanding192,334,810
10 Day Avg. Volume1,304,139
30 Day Avg. Volume1,045,331
Financial Highlights & Ratios
PEG Ratio1.34
Price to Book (P/B)4.41
Price to Sales (P/S)5.46
P/FCF Ratio29.02
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue6.27
Enterprise Value/Gross Profit10.67
Enterprise Value/Ebitda21.44
Forecast
1Y Price Target
$265.40Price Target Upside6.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)9.21
Revenue Forecast (FY)$7.92B
Garmin Business Overview & Revenue Model
Company DescriptionGarmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices in the Americas, the Asia Pacific, Australian Continent, Europe, the Middle East, and Africa. Its Fitness segment offers running and multi-sport watches; cycling products; activity tracking and smartwatch devices; and fitness and cycling accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds, golf devices and mobile apps, and dog tracking and training devices. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions comprising integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponder solutions, weather information and avoidance solutions, datalink and connectivity solutions, portable GPS navigators and wearables, and various services products. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fish finders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, entertainment, digital switching products, and trolling motors. Its Auto segment offers embedded computing models and infotainment systems; personal navigation devices; and cameras. The company sells its products through independent retailers, online retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as an online webshop, garmin.com. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.
How the Company Makes MoneyGarmin generates revenue through multiple streams, primarily by selling hardware products in its key segments: automotive, aviation, marine, fitness, and outdoor. The automotive segment includes navigation devices and infotainment systems, while the aviation sector focuses on avionics and flight navigation solutions. The marine division offers chartplotters and fishfinders, and the fitness segment encompasses smartwatches and fitness trackers. Additionally, Garmin earns revenue from software and services, including mapping and fitness-related subscriptions. Key partnerships with automotive manufacturers and fitness companies enhance its market reach and sales potential. The company's diverse product portfolio and focus on innovation contribute significantly to its earnings.
Garmin Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyGarmin Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operational and financial achievements: record consolidated and segment revenues, expanded operating margins, robust free cash flow, a 17% dividend increase, and a $500M share repurchase program. Management provided constructive 2026 guidance (revenue +9%, EPS +9%) while acknowledging manageable headwinds including memory cost pressure, tariffs, elevated inventory, higher capex, and an auto OEM segment loss that is expected to improve but see near-term revenue declines. The positives (broad-based demand, margin expansion, record operating income, cash generation, and shareholder returns) materially outweigh the contained challenges.Q4-2025 Updates
Positive Updates
Record Consolidated Revenue and Strong Annual Growth
Full year 2025 consolidated revenue of $7.246B, up 15% year-over-year and a new annual record; Q4 2025 revenue of $2.125B, up 17% year-over-year and Garmin's first quarter above $2.0B.
Expanded Margins and Record Operating Income
Full year operating income of $1.876B, up 18% year-over-year with operating margin of 25.9% (up 60 bps); Q4 operating income of $614M, up 19% with operating margin of 28.9% (up 60 bps).
Earnings Per Share Growth
Pro forma EPS for full year 2025 was $8.56, a 16% increase year-over-year; Q4 pro forma EPS was $2.79, up 16% year-over-year.
Fitness Segment Outperformance
Fitness revenue rose 33% to $2.36B, surpassing $2B for the first time; fitness gross margin improved to 60% (+130 bps) and operating income increased 50% to $726M with operating margin expanding 360 bps to 31%.
Broad-Based Segment Strength
Three segments delivered double-digit quarterly growth in Q4: fitness +42%, marine +18%, and aviation +16%. Full-year segment records achieved across all five segments.
Aviation, Marine, and Outdoor Achievements
Aviation revenue +13% to $987M with operating income up 22% to $257M and 75% gross margin; Marine revenue +10% to $1.18B with operating income $251M; Outdoor revenue exceeded $2B (+5%) with 66% gross margin and operating income $690M.
Strong Cash Position, Free Cash Flow and Capital Actions
Cash & marketable securities approx. $4.1B; full-year free cash flow approx. $1.4B (+$24M YoY); proposed annual dividend $4.20 (+17%) and Board approved $500M share repurchase program.
Positive 2026 Guidance
Company expects 2026 revenue ~ $7.9B (+9%), gross margin ~58.5% (down 20 bps), operating income to exceed $2.0B (first time), and pro forma EPS ~ $9.35 (+9%).
Negative Updates
Auto OEM Segment Losses and Near-Term Weakness
Full year auto OEM revenue increased 9% to $665M but produced a $49M operating loss; company expects auto OEM revenue to decrease in 2026 as certain legacy programs end and BMW volumes peak.
Component Cost Pressures and Tariff Headwinds
Management flagged generationally high tariff structures and recent memory cost pressures affecting product costs; guidance incorporates higher product costs and forecasts a modest gross margin decline (~20 bps) in 2026.
Inventory Build and Working Capital Increase
Inventory rose year-over-year to approximately $1.8B; accounts receivable increased to about $1.3B—elevated working capital could pose execution risk if demand shifts.
Higher Operating Expenses and Capex
Fourth quarter operating expenses rose ~14% (+$80M) driven by R&D (+$36M) and SG&A (+$44M); 2026 capital expenditures expected to increase to ~ $400M (up materially) primarily for a new Thailand manufacturing facility.
Tax Impact from 2025 U.S. Legislation
Full year 2025 pro forma effective tax rate increased to 17.4% from 16.7% due to changes in R&D capitalization rules, increasing near-term tax expense (though 2026 rate is expected to decline).
Ratable / Subscription Revenue Still Small
Ratable (subscription/service) revenue remains a small portion of total revenue (~5%) despite growth, limiting recurring-revenue stability compared with transactional sales.
Company Guidance
Garmin guided 2026 consolidated revenue of approximately $7.9 billion (≈+9% vs. 2025), with gross margin around 58.5% (down ~20 bps), operating margin about 25.5% and operating income expected to exceed $2.0 billion for the first time; pro forma EPS is forecast at roughly $9.35 (≈+9% vs. 2025 pro forma EPS $8.56) with a pro forma effective tax rate near 16% (≈-140 bps). Management noted the guide already reflects industry memory cost pressure and tariff impacts, and expects higher product costs partially offset by favorable segment mix and supply‑chain/inventory actions (inventory was about $1.8B at year‑end). Cash and marketable securities were ~ $4.1B and accounts receivable ~ $1.3B; they expect free cash flow of ~ $1.4B in 2026 with capital expenditures of ~ $400M (vs. $270M in 2025) to support a new Thailand facility. The company proposed a $4.20 annual dividend ($1.05/quarter, +17%) and the Board approved a $500M share repurchase program through Dec. 2028; qualitatively, Garmin expects fitness to be the largest contributor to 2026 consolidated growth, outdoor growth to accelerate (stronger in H2), aviation to grow in line with historical norms, marine to be consistent with 2025, and Auto OEM revenue to decline while operating losses narrow.Garmin Financial Statement Overview
Summary
Strong underlying fundamentals: steady revenue expansion with improving earnings in 2024–2025, consistently strong profitability, and an exceptionally conservative balance sheet with minimal leverage. Cash generation is solid and improving recently, though free cash flow has shown some unevenness historically.Income Statement
Revenue has expanded steadily over the last several years, accelerating meaningfully in 2025 after a very soft 2024 growth rate. Profitability is a clear strength, with consistently strong gross and net margins and improving earnings in 2024–2025. A watch item is some year-to-year margin variability (and an unusual 2025 operating margin datapoint), but overall the company shows durable, high-quality profitability for its industry.86
Very Positive
Balance Sheet
The balance sheet is very conservative: debt is minimal relative to equity across all periods, indicating low financial risk and strong flexibility. Equity and total assets have grown over time, supporting a stronger capital base. Returns on equity remain consistently strong, suggesting the company is generating attractive profits without relying on leverage.92
Very Positive
Cash Flow
Cash generation is solid, with operating cash flow and free cash flow rising in recent years and free cash flow generally tracking earnings at a healthy level. Free cash flow growth has been uneven at times (including declines earlier in the period), but the most recent years show improved momentum. Overall cash conversion appears reliable, though not perfectly consistent year to year.84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.25B | 6.30B | 5.23B | 4.86B | 4.98B |
| Gross Profit | 4.26B | 3.70B | 3.00B | 2.81B | 2.89B |
| EBITDA | 2.06B | 1.77B | 1.27B | 1.19B | 1.37B |
| Net Income | 1.66B | 1.41B | 1.29B | 973.59M | 1.08B |
Balance Sheet | |||||
| Total Assets | 10.99B | 9.63B | 8.60B | 7.73B | 7.85B |
| Cash, Cash Equivalents and Short-Term Investments | 2.74B | 2.50B | 1.97B | 1.45B | 1.85B |
| Total Debt | 164.84M | 162.79M | 113.03M | 114.54M | 70.04M |
| Total Liabilities | 2.02B | 1.78B | 1.59B | 1.53B | 1.74B |
| Stockholders Equity | 8.97B | 7.85B | 7.01B | 6.20B | 6.11B |
Cash Flow | |||||
| Free Cash Flow | 1.36B | 1.24B | 1.18B | 542.07M | 702.84M |
| Operating Cash Flow | 1.63B | 1.43B | 1.38B | 788.26M | 1.01B |
| Investing Cash Flow | -645.24M | -393.33M | -332.97M | -145.12M | -475.37M |
| Financing Cash Flow | -844.08M | -626.86M | -636.51M | -840.62M | -486.71M |
Garmin Technical Analysis
Positive
248.90
Price Trends
208.63
Positive
215.08
Positive
216.38
Positive
Market Momentum
7.51
Negative
77.97
Negative
74.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRMN, the sentiment is Positive. The current price of 248.9 is above the 20-day moving average (MA) of 211.26, above the 50-day MA of 208.63, and above the 200-day MA of 216.38, indicating a bullish trend. The MACD of 7.51 indicates Negative momentum. The RSI at 77.97 is Negative, neither overbought nor oversold. The STOCH value of 74.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRMN.
Garmin Risk Analysis
Garmin disclosed 36 risk factors in its most recent earnings report. Garmin reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Garmin Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $45.67B | 27.63 | 19.78% | 1.70% | 16.56% | 3.19% | |
71 Outperform | $9.40B | 83.94 | 7.61% | 0.89% | 10.23% | 25.53% | |
71 Outperform | $69.14B | 33.98 | 16.27% | 1.21% | 8.94% | -39.90% | |
70 Outperform | $113.26B | 72.04 | 14.19% | 1.25% | 18.27% | 771.78% | |
63 Neutral | $41.98B | 230.09 | 3.63% | ― | 20.80% | ― | |
63 Neutral | $15.92B | 38.36 | 7.32% | ― | -0.86% | -75.37% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
GRMN
Garmin
248.90
29.65
13.52%
CGNX
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56.03
23.48
72.15%
GLW
Corning
139.51
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179.97%
COHR
Coherent Corp
248.18
167.96
209.37%
TEL
TE Connectivity
234.73
83.70
55.42%
TRMB
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67.62
-3.31
-4.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.