Garmin (GRMN) AI Stock Analysis

• Market Cap: $39.33B
• Dividend Yield: 1.7%
• Average Volume (3M): 823.75K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.94
• Revenue Growth: 16.56%
• EPS Growth: 3.19%
• Country: US
• Employees: 21,800
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.99
• Shares Outstanding: 192,334,810
• 10 Day Avg. Volume: 862,115
• 30 Day Avg. Volume: 823,745
• PEG Ratio: 3.15
• Price to Book (P/B): 5.13
• Price to Sales (P/S): 6.39
• P/FCF Ratio: 32.47
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 5.31
• Enterprise Value/Gross Profit: 9.04
• Enterprise Value/Ebitda: 18.25
• 1Y Price Target: $240.50
• Price Target Upside: 17.52% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $237.00 ▲(15.81% Upside)

Garmin's overall stock score reflects strong financial performance and a positive earnings call, which are the most significant factors. However, technical analysis indicates bearish momentum, which tempers the overall score. Valuation is reasonable but not compelling enough to offset the technical weakness. The company's strategic focus on growth segments and new product introductions supports a positive outlook, but market sentiment remains cautious.

Positive Factors

Revenue Growth

Garmin's strong revenue growth across multiple segments indicates robust market demand and effective product strategy, supporting long-term business expansion.

Segment Performance

The rapid growth in the Fitness segment highlights Garmin's competitive edge in wearables, positioning it well in a growing market and driving future revenue.

Balance Sheet Health

Garmin's low debt levels and high equity provide financial stability and flexibility, enabling strategic investments and resilience against economic fluctuations.

Negative Factors

Outdoor Segment Decline

The decline in the Outdoor segment suggests challenges in product lifecycle management, potentially impacting overall growth if not addressed.

Gross Margin Pressure

Pressure on gross margins from rising costs and tariffs could affect profitability, necessitating cost management strategies to maintain margins.

Auto OEM Segment Challenges

Challenges in the Auto OEM segment, including operating losses, highlight potential risks in this area, requiring strategic adjustments to improve performance.

Garmin Business Overview & Revenue Model

Company Description

Garmin 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 Money

Garmin 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 Financial Statement Overview

Summary

Garmin exhibits strong financial health with robust profitability, a solid balance sheet, and effective cash flow management. The company demonstrates a consistent growth trajectory, although revenue growth has slowed. The low leverage and high return on equity highlight financial stability, while strong cash flow metrics indicate efficient operations.

Income Statement

Garmin's income statement shows strong profitability with a consistent gross profit margin around 58% and a net profit margin above 22% in the TTM. Revenue growth has been positive, with a 2.74% increase in the TTM, indicating a healthy growth trajectory. EBIT and EBITDA margins have also improved, reflecting operational efficiency. However, the growth rate has slowed compared to previous years, which could be a concern if it continues.

Balance Sheet

Garmin maintains a robust balance sheet with a very low debt-to-equity ratio of 0.018 in the TTM, indicating minimal leverage and financial risk. The return on equity is strong at 19.26%, showcasing effective use of shareholder funds. The equity ratio is healthy, suggesting a solid capital structure. Overall, the balance sheet reflects financial stability and low risk.

Cash Flow

Garmin's cash flow statement highlights a strong free cash flow growth of 18.25% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is close to 0.89, showing efficient cash conversion. The free cash flow to net income ratio is also strong at 0.85, reflecting good cash flow management. However, the operating cash flow coverage ratio has slightly decreased, which should be monitored.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.94B	6.30B	5.23B	4.86B	4.98B	4.19B
Gross Profit	4.08B	3.70B	3.00B	2.81B	2.89B	2.48B
EBITDA	2.02B	1.77B	1.27B	1.19B	1.37B	1.18B
Net Income	1.57B	1.41B	1.29B	973.59M	1.08B	992.32M
Balance Sheet
Total Assets	10.52B	9.63B	8.60B	7.73B	7.85B	7.03B
Cash, Cash Equivalents and Short-Term Investments	2.54B	2.50B	1.97B	1.45B	1.85B	1.85B
Total Debt	155.77M	162.79M	113.03M	114.54M	70.04M	75.96M
Total Liabilities	2.04B	1.78B	1.59B	1.53B	1.74B	1.52B
Stockholders Equity	8.48B	7.85B	7.01B	6.20B	6.11B	5.52B
Cash Flow
Free Cash Flow	1.33B	1.24B	1.18B	542.07M	702.84M	947.80M
Operating Cash Flow	1.56B	1.43B	1.38B	788.26M	1.01B	1.14B
Investing Cash Flow	-716.40M	-393.33M	-332.97M	-145.12M	-475.37M	-260.52M
Financing Cash Flow	-802.90M	-626.86M	-636.51M	-840.62M	-486.71M	-461.76M

Garmin Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 204.65
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRMN, the sentiment is Negative. The current price of 204.65 is below the 20-day moving average (MA) of 207.73, above the 50-day MA of 202.91, and below the 200-day MA of 214.68, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 46.10 is Neutral, neither overbought nor oversold. The STOCH value of 30.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRMN.

Garmin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEL	75 Outperform	$65.07B	31.98	16.27%	1.21%	8.94%	-39.90%
GRMN	74 Outperform	$39.33B	25.20	19.66%	1.70%	16.56%	3.19%
TRMB	74 Outperform	$16.67B	46.50	6.13%	―	-0.86%	-75.37%
CGNX	70 Outperform	$6.54B	60.31	7.21%	0.89%	10.23%	25.53%
GLW	70 Outperform	$89.41B	56.98	14.19%	1.25%	18.27%	771.78%
COHR	66 Neutral	$34.75B	311.08	3.08%	―	20.80%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%