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Garmin Ltd GRMN

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Morningstar’s Analysis

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Garmin Beats Expectations but Remains Cautious Amid Evolving Chip Shortage; Raising FVE to $98

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Narrow-moat Garmin delivered solid first-quarter results with four of five business segments experiencing double-digit growth. We are slightly raising our fair value estimate to $98 and continue to view shares as overvalued. Pandemic-induced tailwinds catapulted Garmin through 2020 as demand for its marine, fitness, and outdoor segments unsurprisingly grew. As the pandemic begins to subside, the demand landscape for Garmin’s isolation-friendly segments has seen little change. Based on conversations with customers and partners, management views the lifestyle changes benefiting its business to be durable and long term. We view the tailwind optimism as appropriate, but due to macroeconomic factors affecting electronic components supply globally, management has cautiously maintained its Feb. 17 issued guidance.

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Company Profile

Business Description

Garmin produces GPS-enabled hardware and software for five verticals: fitness, outdoors, auto, aviation, and marine. The company relies on licensing mapping data to enable its hardware specialized for often niche activities like scuba diving or sailing. Garmin operates in 100 countries and sells its products via distributors as well as relationships with original equipment manufacturers.

Contact
Muhlentalstrasse 2
Schaffhausen, 8200, Switzerland
T +41 526301600
Sector Technology
Industry Scientific & Technical Instruments
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 25, 2021
Stock Type
Employees 16,000

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