Garmin (GRMN) AI Stock Analysis

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Garmin

(NYSE:GRMN)

76Outperform

Garmin's strong financial performance and earnings call guidance are major strengths, highlighting growth and resilience. Technical analysis points to potential short-term challenges, but valuation remains fair. Overall, Garmin's financial health and strategic positioning in the market support a solid stock score.

Positive Factors

Financial Performance

Garmin reported another strong earnings beat for 4Q24 and provided full-year guidance for 2025 that aligns more with the high end of expectations.

Market Demand

Wearables demand remains robust, boosting revenue.

New Product Development

Ongoing innovation and new product development, including new halo product categories, will open new markets that will continue to drive revenue and cash flow growth and increasing shareholder value creation.

Negative Factors

AutoOEM Business Outlook

Garmin's AutoOEM business outlook has worsened due to consumers pulling back and BMW cutting production forecasts.

Import Tariffs

A 32% tariff on Taiwan imports poses a risk to Garmin, which imports the majority of its goods from Taiwan.

Macroeconomic Environment

The macro environment is causing uncertainty, slowing sales, and limiting incremental buyers as the consumer cycle decelerates.

Garmin (GRMN) vs. S&P 500 (SPY)

Market Cap

$36.93B

Dividend Yield1.61%

Average Volume (3M)1.26M

Price to Earnings (P/E)26.3

Beta (1Y)0.94

Revenue Growth18.08%

EPS Growth7.28%

CountryUS

Employees21,800

SectorTechnology

Sector Strength69

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)7.59

Shares Outstanding192,541,460

10 Day Avg. Volume1,026,666

30 Day Avg. Volume1,260,510

Financial Highlights & Ratios

PEG Ratio3.61

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.04

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit10.34

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$199.80

Price Target Upside6.97% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering6

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 primarily through the sale of its GPS-enabled products and services across five main segments: Fitness, Outdoor, Aviation, Marine, and Auto. Each segment contributes differently to the overall revenue, with the Fitness and Outdoor segments being the most significant in recent times, driven by the growing demand for wearable technology and activity tracking devices. The company also earns from map updates, subscription services, and applications that complement its hardware. Garmin's partnerships with automotive manufacturers for integrated navigation systems and aviation companies for cockpit solutions also play a crucial role in its revenue generation. Additionally, Garmin invests in continuous research and development to innovate and maintain its competitive edge, which helps drive sales and profitability.

Garmin Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how much revenue each business segment contributes, highlighting Garmin's diverse product lines and indicating which areas are driving growth or facing challenges.

Chart InsightsGarmin's revenue growth is robust across all segments, with notable momentum in the fitness and outdoor categories, which saw significant increases. The earnings call highlights a 23% year-over-year revenue surge, driven by strong performance in fitness and outdoor, which are expected to continue growing by 10% each in 2025. However, challenges persist in the aviation and auto OEM segments due to increased R&D costs and a softer market outlook, particularly in China. Garmin's strategic investments and product launches are positioning it well for sustained growth despite these hurdles.

Data provided by:

Main Street Data

Garmin Financial Statement Overview

Summary

Garmin exhibits a strong financial profile with impressive income statement metrics, robust balance sheet, and effective cash flow management. High margins and low leverage highlight a competitive position, though slightly negative free cash flow growth is a minor concern.

Income Statement

Very Positive

Garmin's income statement reveals impressive growth and profitability metrics. The TTM data shows a gross profit margin of 58.57%, indicating strong cost management and product pricing strategy. The net profit margin stands at 22.76%, highlighting efficient operations and a healthy bottom line. Revenue growth rate from the previous year is 2.44%, showing steady expansion. EBIT and EBITDA margins are also robust at 25.24% and 26.62% respectively, reflecting operational efficiency and strong earnings before interest and taxes.

Balance Sheet

Very Positive

The balance sheet is notably strong, with a low debt-to-equity ratio of 0.02, indicating minimal leverage and financial risk. The return on equity (ROE) is a healthy 17.95%, showcasing effective use of shareholder funds. The equity ratio stands at 83.57%, demonstrating a solid capital structure with substantial equity backing, which suggests stability and financial health.

Cash Flow

Very Positive

Cash flow analysis indicates solid cash generation capabilities. The free cash flow growth rate is slightly negative at -1.73%, but this is offset by a strong operating cash flow to net income ratio of 0.97, reflecting high-quality earnings. The free cash flow to net income ratio of 0.83 further supports the company's ability to generate cash relative to its earnings, indicating efficient cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.30B	5.23B	4.86B	4.98B	4.19B
	Gross Profit
3.70B	3.00B	2.81B	2.89B	2.48B
	EBIT
1.59B	1.09B	1.03B	1.22B	1.05B
	EBITDA
1.77B	1.27B	1.19B	1.37B	1.18B
	Net Income Common Stockholders
1.41B	1.29B	973.59M	1.08B	992.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.50B	1.97B	1.45B	1.85B	1.85B
	Total Assets
9.63B	8.60B	7.73B	7.85B	7.03B
	Total Debt
134.89M	113.03M	114.54M	70.04M	75.96M
	Net Debt
-1.94B	-1.58B	-1.16B	-1.43B	-1.38B
	Total Liabilities
1.78B	1.59B	1.53B	1.74B	1.52B
	Stockholders Equity
7.85B	7.01B	6.20B	6.11B	5.52B
Cash Flow		Free Cash Flow
1.24B	1.18B	542.07M	702.84M	947.80M
	Operating Cash Flow
1.43B	1.38B	788.26M	1.01B	1.14B
	Investing Cash Flow
-393.33M	-332.97M	-145.12M	-475.37M	-260.52M
	Financing Cash Flow
-626.86M	-636.51M	-840.62M	-486.71M	-461.76M

Garmin Technical Analysis

Technical Analysis Sentiment

Negative

Last Price186.78

Price Trends

50DMA

205.87

Negative

100DMA

209.53

Negative

200DMA

194.92

Negative

Market Momentum

MACD

-3.13

Negative

RSI

45.86

Neutral

STOCH

37.33

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 186.78 is below the 20-day moving average (MA) of 190.33, below the 50-day MA of 205.87, and below the 200-day MA of 194.92, indicating a neutral trend. The MACD of -3.13 indicates Negative momentum. The RSI at 45.86 is Neutral, neither overbought nor oversold. The STOCH value of 37.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEL	77 Outperform	$38.17B	20.42	11.33%	1.78%	1.23%	-58.22%
GRMN	76 Outperform	$36.93B	26.26	19.04%	1.61%	18.08%	7.28%
FTV	72 Outperform	$22.96B	28.61	8.12%	0.48%	2.75%	-2.90%
KEYS	71 Outperform	$25.67B	42.53	12.22%	―	-6.07%	-35.80%
GLW	69 Neutral	$39.21B	87.78	4.14%	2.50%	9.77%	-26.50%
TRMB	67 Neutral	$14.92B	10.25	29.37%	―	-3.04%	388.42%
Sector *	60 Neutral	$10.95B	10.52	-7.07%	3.00%	7.30%	-12.04%

* Technology Sector Average

Performance Comparison

GRMN

Garmin

191.78

26.55

16.07%

GLW

Corning

45.76

13.18

40.45%

TEL

TE Connectivity

149.93

10.13

7.25%

TRMB

Trimble

64.59

8.39

14.93%

KEYS

Keysight Technologies

148.52

-2.08

-1.38%

FTV

Fortive

67.55

-9.11

-11.88%

Garmin Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -8.49%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

Garmin reported a record first quarter with strong growth in key segments and positive foreign exchange impacts. However, challenges such as tariff-related costs and a slight reduction in demand assumptions temper the overall outlook.

Q1-2025 Updates

Positive Updates

Record First Quarter Revenue

Consolidated revenue increased 11% to $1.54 billion, marking a new first quarter record for Garmin.

Strong Growth in Fitness and Outdoor Segments

Fitness segment revenue increased 12% to $385 million, and Outdoor segment revenue increased 20% to $438 million, both driven by strong product demand and new product launches.

Positive Foreign Exchange Impact

The weakened U.S. dollar relative to other currencies is benefiting Garmin's revenue and margins, with approximately 40% of revenue generated in non-U.S. dollar currencies.

Auto OEM Segment Growth

Revenue in the Auto OEM segment increased 31% to $169 million, driven by increased shipments to BMW.

Stable Earnings Guidance

Despite tariff impacts, Garmin maintains its pro forma EPS guidance at $7.80, aided by foreign exchange benefits and mitigation strategies.

Negative Updates

Tariff Impact

Garmin anticipates approximately $100 million of increased costs due to tariffs, with assumptions including a 10% baseline tariff on products manufactured outside the U.S. and a 145% tariff on Chinese imports.

Marine Segment Revenue Decline

Marine segment revenue decreased 2% to $319 million, attributed to the timing of promotions and continued market softness.

Demand Reduction Assumptions

Garmin assumes a modest reduction in demand moving forward due to the current trade environment and potential consumer impact.

Company Guidance

During Garmin Limited's first quarter 2025 earnings call, the company provided updated guidance reflecting their strong start to the year, with consolidated revenue increasing by 11% to $1.54 billion. The company reported a record first quarter operating income of $333 million, with gross and operating margins of 57.6% and 21.7%, respectively, and a pro forma EPS of $1.61. Despite the dynamic global trade environment, including a potential $100 million cost increase due to tariffs, Garmin maintained its full-year pro forma EPS guidance of $7.80, supported by favorable foreign exchange impacts and planned mitigations. Revenue forecasts for 2025 were adjusted, with Fitness expected to grow by 15%, Outdoor by 10%, Aviation by 5%, Marine expected to remain flat, and Auto OEM maintaining a 7% growth estimate. Garmin's strategic mitigations, such as sourcing changes and pricing adjustments, along with strong product lines and market share gains, are expected to help offset the tariff impacts.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.