Garmin (GRMN) AI Stock Analysis

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Garmin

(NYSE:GRMN)

77Outperform

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 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

$38.12B

Dividend Yield1.51%

Average Volume (3M)1.12M

Price to Earnings (P/E)26.1

Beta (1Y)0.96

Revenue Growth18.08%

EPS Growth7.28%

CountryUS

Employees21,800

SectorTechnology

Sector Strength69

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)1.61

Shares Outstanding192,541,460

10 Day Avg. Volume1,088,927

30 Day Avg. Volume1,122,075

Financial Highlights & Ratios

PEG Ratio6.37

Price to Book (P/B)4.51

Price to Sales (P/S)0.00

P/FCF Ratio30.27

Enterprise Value/Market Cap0.91

Enterprise Value/Revenue1.43

Enterprise Value/Gross Profit9.21

Enterprise Value/Ebitda5.34

Forecast

1Y Price Target

$199.80

Price Target Upside0.92% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering6

Garmin Business Overview & Revenue Model

Company DescriptionGarmin Ltd. is a global leader in the design and manufacture of navigation and communication devices, catering to a variety of sectors including automotive, aviation, marine, outdoor, and fitness. The company is renowned for its innovative GPS technology and smart devices, which are used by consumers, businesses, and industries worldwide. Garmin’s product range includes wearable devices like smartwatches, handheld GPS units, dashboard cameras, and marine electronics, all aimed at enhancing user experiences in navigation and activity tracking.

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
Analyzes revenue from different business areas such as fitness, outdoor, aviation, marine, and auto, highlighting which segments drive growth and where Garmin might face challenges.

Chart InsightsGarmin's Fitness and Outdoor segments are experiencing robust growth, driven by strong product demand and new launches, aligning with the company's guidance for 2025. The Aviation segment shows steady progress, while the Marine segment faces challenges, including market softness and promotional timing issues. Despite tariff-related cost pressures, Garmin's strategic mitigations and favorable foreign exchange impacts are expected to support continued revenue growth. The Auto segment benefits from increased shipments to BMW, contributing to its strong performance. Overall, Garmin maintains a positive outlook, with strategic adjustments to navigate the dynamic trade environment.

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
1.76B	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
2.20B	2.50B	1.97B	1.45B	1.85B	1.85B
	Total Assets
8.63B	9.63B	8.60B	7.73B	7.85B	7.03B
	Total Debt
105.86M	134.89M	113.03M	114.54M	70.04M	75.96M
	Net Debt
-1.82B	-1.94B	-1.58B	-1.16B	-1.43B	-1.38B
	Total Liabilities
1.39B	1.78B	1.59B	1.53B	1.74B	1.52B
	Stockholders Equity
7.25B	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 Price197.98

Price Trends

50DMA

201.30

Negative

100DMA

207.84

Negative

200DMA

195.69

Positive

Market Momentum

MACD

-1.44

Negative

RSI

55.21

Neutral

STOCH

72.00

Neutral

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 197.98 is above the 20-day moving average (MA) of 192.90, below the 50-day MA of 201.30, and above the 200-day MA of 195.69, indicating a neutral trend. The MACD of -1.44 indicates Negative momentum. The RSI at 55.21 is Neutral, neither overbought nor oversold. The STOCH value of 72.00 is Neutral, 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRMN	77 Outperform	$38.12B	26.08	19.04%	1.51%	18.08%	7.28%
TEL	76 Outperform	$47.74B	35.28	11.33%	1.62%	1.23%	-58.22%
KEYS	74 Outperform	$28.10B	47.27	12.22%	―	-6.07%	-35.80%
FTV	74 Outperform	$25.06B	32.37	7.70%	0.43%	0.85%	-10.01%
TRMB	70 Outperform	$16.83B	11.60	31.00%	―	-6.93%	537.94%
GLW	69 Neutral	$40.23B	89.88	4.14%	2.38%	9.77%	-26.50%
Sector *	60 Neutral	$11.39B	10.52	-6.21%	2.95%	7.68%	-11.12%

* Technology Sector Average

Performance Comparison

GRMN

Garmin

200.44

33.21

19.86%

GLW

Corning

47.62

13.57

39.85%

TEL

TE Connectivity

162.39

15.64

10.66%

TRMB

Trimble

71.25

14.16

24.80%

KEYS

Keysight Technologies

165.06

13.56

8.95%

FTV

Fortive

73.65

-3.49

-4.52%

Garmin Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -3.00%|

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.