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Garmin’s FY21 Outlook Beats Estimates As 4Q Results Shine

Garmin delivered better-than-expected 4Q results. Additionally, the tech company’s 2021 outlook also came in ahead of analysts’ estimates. However, shares fell 2.2% on Wednesday.

Garmin’s (GRMN) 4Q earnings of $1.73 per share exceeded the consensus estimates of $1.39 per share and jumped 34% year-over-year, led by top-line growth and improved gross and operating margins.

The company’s 4Q revenues rose about 23% year-over-year to $1.35 billion and topped the Street’s estimates of $1.18 billion. Strong growth in the marine, fitness, and outdoor segments fuelled 4Q revenue growth.

As for 2021, Garmin expects to generate EPS of $5.15, higher than the consensus estimates of $5.11. The company anticipates 2021 revenues of $4.6 billion, compared to analysts’ estimates of $4.4 billion. Furthermore, Garmin forecasted revenue growth across all of its business segments in 2021. (See Garmin stock analysis on TipRanks).

Following the financial results, Credit Suisse analyst Robert Spingarn raised the stock’s price target to $129 from $107. In a note to investors, Spingarn said that the 4Q results were “excellent”, driven by “exceptional” growth in its segments and strong execution against a “large and growing” total addressable market. However, the analyst maintained a Hold rating, citing the stock’s valuation.

Overall, consensus among analysts is a Moderate Buy based on 3 Buys and 3 Holds. The average analyst price target of $130.20 implies that the shares are almost fully priced at current levels. Shares have gained about 35.4% over the past year.

GRMN scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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