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Switzerland-based Garmin Ltd. (GRMN), founded in 1989, has become a global powerhouse in wireless tech. From fitness trackers to adventure watches, aviation avionics, and marine navigation, Garmin’s devices push boundaries. With platforms like Garmin Connect, users track their fitness and adventures. Whether it's a race, a hike, or navigating the skies, Garmin's gear is built to perform. The brand’s relentless innovation continues to lead in every sector it touches.
Valued at $40.4 billion by market cap, shares of Garmin have surged 75.9% over the past 52 weeks and 65.6% on a YTD basis, blowing past the broader S&P 500 Index ($SPX), which rallied 32.1% over the past year and returned 26.2% in 2024.
Even more impressive, when narrowing the focus, GRMN also edged past the iShares Future Metaverse Tech And Communications ETF’s (IVRS) 15.5% gains over the past year and 9.1% returns on a YTD basis.
Garmin has outperformed the broader market in 2024, driven by robust demand across its fitness, auto OEM, and outdoor segments, alongside innovative product launches. The company’s focus on advanced wearables and aviation technology, combined with operational efficiency and strategic market expansion, has solidified investor confidence and propelled stock performance.
On Oct. 30, Garmin delivered a remarkable Q3 earnings report, with the stock surging 23.3%. Sales reached $1.59 billion, a 24% increase year over year, fueled by double-digit gains in auto OEM, fitness, marine, and outdoor sectors. Adjusted EPS rose 41% to $1.99, surpassing Wall Street’s expectations by 36.3%.
Garmin posted record revenue across all five segments, with auto OEM sales leading the charge. The fitness products group grew thanks to the successful launch of new wearables. Garmin’s acquisition of JL Audio in 2023 boosted its marine segment, introducing high-end audio systems. Furthermore, Garmin’s shift toward premium technology increased its gross margin to 60%. As a result, the company expects fiscal 2024 revenue to be $6.12 billion, a growth of roughly 17%. Adjusted EPS is estimated to be $6.85, which implies an annual growth of about 23%.
For the current fiscal year, ending in December, analysts expect Garmin’s EPS to surge 25.4% year over year to $7.01. Plus, the company's earnings surprise history has been stellar, as it has surpassed consensus estimates in each of the last four quarters.
Among the six analysts covering GRMN stock, the consensus is a “Hold.” The current rating is based on one “Strong Buy” rating, two “Holds,” one “Moderate Sell,” and two “Strong Sells.”
The overall configuration has become less bullish, as GRMN stock has garnered two new “Strong Sell” ratings over the past three months.
Last week, Bank of America Securities (BAC) boosted GRMN’s price target from $150 to $185, acknowledging its robust performance and revised 2024 EPS forecast of $6.85. Despite this upward adjustment, the firm maintained an "Underperform" rating, cautioning that Garmin’s current valuation might already reflect its growth potential. While the company shines in niche markets and exceeds expectations, BofA’s tempered stance signals concerns about limited upside.
Although GRMN stock currently trades above the mean price target of $186.80, the Street-high target price of $215 suggests a marginal upside potential.
