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Garmin Ltd GRMN

Morningstar Rating
$137.68 +0.41 (0.30%)
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Company Report

Garmin Earnings: Impressive Revenue Beat and Margin Improvement Provides Optimism

We are raising our fair value estimate for narrow-moat Garmin to $132 per share from $124 after the firm reported fourth-quarter results above FactSet consensus and our expectations. We are impressed with Garmin’s ability to deliver on revenue growth and profitability thus far, despite end market headwinds. As shipping bottlenecks ease and demand momentum improves, we expect a healthy boost in revenue, profitability, and cash flow for the firm in 2024. We continue to believe the firm’s long-term value is solid, as Garmin’s industry-leading products lie at the core of its customers’ functions. Management laid out its 2024 targets, which came in higher than our top-line expectations but slightly lower than our bottom-line estimates due to changing revenue mix. With shares up around 11% upon market open, we view the stock as fairly valued.

Price vs Fair Value

GRMN is trading at a 4% premium.
Price
$137.30
Fair Value
$479.00
Uncertainty
Medium
1-Star Price
$463.50
5-Star Price
$76.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

We think Garmin will be able to slowly enter the commercial aircraft OEM space successfully, as partnerships continue between midsize and large aircraft OEMs.

Bears

New FAA modernization regulation could open the doors for new avionics entrants at the cost of Garmin’s foothold.

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News

Trading Information

Previous Close Price
$137.27
Day Range
$136.27137.99
52-Week Range
$93.75139.45
Bid/Ask
$137.68 / $137.72
Market Cap
$26.41 Bil
Volume/Avg
477,200 / 896,907

Key Statistics

Price/Earnings (Normalized)
26.26
Price/Sales
5.04
Dividend Yield (Trailing)
2.13%
Dividend Yield (Forward)
2.19%
Total Yield
2.50%

Company Profile

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.
Sector
Technology
Industry
Scientific & Technical Instruments
Stock Style Box
Large Core
Total Number of Employees
19,900

Competitors

Valuation

Metric
GRMN
HON
005930
Price/Earnings (Normalized)
26.2621.2210.95
Price/Book Value
3.768.121.41
Price/Sales
5.043.601.69
Price/Cash Flow
21.9326.518.83
Price/Earnings
GRMN
HON
005930

Financial Strength

Metric
GRMN
HON
005930
Quick Ratio
2.120.841.79
Current Ratio
3.411.272.59
Interest Coverage
9.948.15
Quick Ratio
GRMN
HON
005930

Profitability

Metric
GRMN
HON
005930
Return on Assets (Normalized)
17.04%9.49%4.31%
Return on Equity (Normalized)
21.18%34.73%5.57%
Return on Invested Capital (Normalized)
19.73%16.29%4.52%
Return on Assets
GRMN
HON
005930
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