Garmin (GRMN) AI Stock Analysis

• Market Cap: $39.94B
• Dividend Yield: 1.44%
• Average Volume (3M): 854.66K
• Price to Earnings (P/E): 27.3
• Beta (1Y): 0.98
• Revenue Growth: 18.08%
• EPS Growth: 7.28%
• Country: US
• Employees: 21,800
• Sector: Technology
• Sector Strength: 82
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 1.61
• Shares Outstanding: 192,541,460
• 10 Day Avg. Volume: 779,539
• 30 Day Avg. Volume: 854,664
• PEG Ratio: 3.15
• Price to Book (P/B): 5.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.47
• Enterprise Value/Market Cap: 0.61
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 6.46
• Enterprise Value/Ebitda: 3.69
• 1Y Price Target: $178.50
• Price Target Upside: -15.05% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $225.00 ▲(7.08%Upside)

Garmin's overall stock score reflects its strong financial performance, highlighted by impressive profitability and low leverage. The earnings call supports a positive outlook despite tariff challenges. Technical analysis indicates a neutral stance, and valuation suggests moderate growth expectations. These factors combine to provide a solid investment proposition, albeit with some caution due to external cost pressures.

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 Strategy

GRMN's ongoing cadence of new product introductions along with upcoming new product categories will drive its expansion into new markets, continue to drive the growth of its ecosystem, and drive accelerating growth.

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

Macroeconomic Environment

Concern exists that growth will slow across segments due to the current macro environment and consumers pulling back on spending.

Segment Performance

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

Trade and Tariffs

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

Garmin Business Overview & Revenue Model

Company Description

Garmin Ltd. (GRMN) is a multinational technology company that specializes in GPS technology and wearable devices across several sectors, including automotive, aviation, marine, outdoor, and fitness. The company is renowned for its innovative products such as GPS navigation systems, smartwatches, and activity trackers that are designed to enhance users' experiences in their respective fields.

How the Company Makes Money

Garmin makes money primarily through the sale of its diverse range of products, which are distributed across its five business segments: automotive, aviation, marine, outdoor, and fitness. Each segment offers a variety of specialized products, such as GPS devices for cars, avionics systems for aircraft, sonar devices for marine use, and smartwatches for outdoor and fitness enthusiasts. Garmin's revenue streams are bolstered by its strong brand presence and product innovation, which drive consumer demand. Additionally, the company benefits from strategic partnerships and distribution agreements, which expand its market reach and boost sales. Garmin's earnings are also supported by recurring revenue from subscription-based services, particularly in the aviation and marine sectors, where customers pay for ongoing access to updated maps, charts, and other digital content.

Garmin Financial Statement Overview

Summary

Garmin presents a strong financial profile with robust profitability, low leverage, and effective cash flow management. The company demonstrates steady revenue growth and high margins, suggesting a competitive position in the hardware industry. While the free cash flow growth rate is slightly negative, other cash flow metrics remain strong, ensuring financial stability and flexibility.

Income Statement

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

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

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.45B	6.30B	5.23B	4.86B	4.98B	4.19B
	Gross Profit
3.78B	3.70B	3.00B	2.81B	2.89B	2.48B
	EBIT
1.63B	1.59B	1.09B	1.03B	1.22B	1.05B
	EBITDA
1.81B	1.77B	1.27B	1.19B	1.37B	1.18B
	Net Income Common Stockholders
1.47B	1.41B	1.29B	973.59M	1.08B	992.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.45B	2.50B	1.97B	1.45B	1.85B	1.85B
	Total Assets
7.73B	9.63B	8.60B	7.73B	7.85B	7.03B
	Total Debt
114.54M	134.89M	113.03M	114.54M	70.04M	75.96M
	Net Debt
-1.16B	-1.94B	-1.58B	-1.16B	-1.43B	-1.38B
	Total Liabilities
1.53B	1.78B	1.59B	1.53B	1.74B	1.52B
	Stockholders Equity
6.20B	7.85B	7.01B	6.20B	6.11B	5.52B
Cash Flow		Free Cash Flow
1.22B	1.24B	1.18B	542.07M	702.84M	947.80M
	Operating Cash Flow
1.42B	1.43B	1.38B	788.26M	1.01B	1.14B
	Investing Cash Flow
-489.06M	-393.33M	-332.97M	-145.12M	-475.37M	-260.52M
	Financing Cash Flow
-675.47M	-626.86M	-636.51M	-840.62M	-486.71M	-461.76M

Garmin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 210.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 210.12 is above the 20-day moving average (MA) of 203.84, above the 50-day MA of 197.34, and above the 200-day MA of 199.00, indicating a bullish trend. The MACD of 2.74 indicates Negative momentum. The RSI at 64.73 is Neutral, neither overbought nor oversold. The STOCH value of 95.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRMN.

Garmin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KEYS	78 Outperform	$28.16B	38.43	14.30%	―	-1.16%	-7.04%
TEL	78 Outperform	$48.83B	36.09	11.33%	1.60%	1.23%	-58.22%
GRMN	77 Outperform	$39.94B	27.33	19.04%	1.44%	18.08%	7.28%
FTV	77 Outperform	$24.70B	31.90	7.70%	0.44%	0.85%	-10.01%
TRMB	77 Outperform	$17.23B	11.78	31.00%	―	-6.93%	537.94%
GLW	64 Neutral	$43.35B	96.84	4.14%	2.20%	9.77%	-26.50%
Sector *	62 Neutral	$11.90B	10.64	-7.50%	2.90%	7.41%	-8.19%