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Garmin (GRMN)
NYSE:GRMN
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Garmin
(NYSE:GRMN)
Rating:77Outperform
Price Target:
$225.00
▲(8.02%Upside)
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 (GRMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.94B
Dividend Yield1.45%
Average Volume (3M)854.66K
Price to Earnings (P/E)27.3
Beta (1Y)0.98
Revenue Growth18.08%
EPS Growth7.28%
CountryUS
Employees21,800
SectorTechnology
Sector Strength84
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.61
Shares Outstanding192,541,460
10 Day Avg. Volume779,539
30 Day Avg. Volume854,664
Financial Highlights & Ratios
PEG Ratio6.93
Price to Book (P/B)4.90
Price to Sales (P/S)0.00
P/FCF Ratio32.94
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue1.56
Enterprise Value/Gross Profit10.07
Enterprise Value/Ebitda5.76
Forecast
1Y Price Target
$178.50Price Target Upside-14.30% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering5
Garmin Business Overview & Revenue Model
Company DescriptionGarmin 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 MoneyGarmin 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 Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and where strategic focus may be needed.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and where strategic focus may be needed.
Data provided by:
Main Street Data
Main Street DataGarmin Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 2.05%|
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.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.92
Very Positive
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.88
Very Positive
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.85
Very Positive
| 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
Positive
208.29
Price Trends
197.41
Positive
207.09
Positive
198.84
Positive
Market Momentum
2.47
Negative
62.26
Neutral
89.26
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 208.29 is above the 20-day moving average (MA) of 203.23, above the 50-day MA of 197.41, and above the 200-day MA of 198.84, indicating a bullish trend. The MACD of 2.47 indicates Negative momentum. The RSI at 62.26 is Neutral, neither overbought nor oversold. The STOCH value of 89.26 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $27.87B | 38.18 | 14.30% | ― | -1.16% | -7.04% | |
78 Outperform | $48.83B | 36.09 | 11.33% | 1.62% | 1.23% | -58.22% | |
77 Outperform | $39.94B | 27.33 | 19.04% | 1.45% | 18.08% | 7.28% | |
77 Outperform | $24.82B | 32.06 | 7.70% | 0.44% | 0.85% | -10.01% | |
77 Outperform | $17.23B | 11.78 | 31.00% | ― | -6.93% | 537.94% | |
64 Neutral | $43.43B | 97.03 | 4.14% | 2.21% | 9.77% | -26.50% | |
62 Neutral | $11.80B | 10.31 | -7.45% | 2.91% | 7.43% | -7.78% |
* Technology Sector Average
Performance Comparison
GRMN
Garmin
208.29
49.32
31.02%
GLW
Corning
50.89
14.43
39.58%
TEL
TE Connectivity
166.00
18.99
12.92%
TRMB
Trimble
72.36
17.06
30.85%
KEYS
Keysight Technologies
162.56
26.37
19.36%
FTV
Fortive
73.21
0.68
0.94%
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.