Garmin’s Growth Soars as Company Delivers Impressive Q3 Results
Switzerland-based Garmin Ltd. (GRMN), founded in 1989, has established itself as a leader in wireless technology. The firm produces a wide range of devices including fitness trackers, adventure watches, aviation equipment, and marine navigation systems. With platforms like Garmin Connect, users can effectively monitor their fitness and adventures. Whether it’s racing, hiking, or flying, Garmin’s gear is engineered for excellence and performance. Continually pushing the envelope, Garmin remains a front-runner in all sectors it operates in.
With a market cap of $40.4 billion, Garmin shares have dramatically increased, climbing by 75.9% over the last 52 weeks, and 65.6% year-to-date. This surge outstrips the broader S&P 500 Index ($SPX), which gained 32.1% over the past year and delivered a 26.2% return in 2024.
When examining the numbers closely, Garmin has also outperformed the iShares Future Metaverse Tech And Communications ETF’s (IVRS) 15.5% gains over the past year and 9.1% returns on a year-to-date basis.
Garmin’s strong performance in 2024 is bolstered by high demand in its fitness, automotive OEM, and outdoor segments, alongside innovative product launches. The company’s commitment to advanced wearable technology and aviation equipment, combined with operational efficiency and strategic market expansion, has strengthened investor trust and enhanced stock performance.
On Oct. 30, Garmin released a remarkable Q3 earnings report that caused its stock to jump 23.3%. The company reported sales of $1.59 billion, marking a gain of 24% year-over-year. This increase was driven by double-digit growth in the auto OEM, fitness, marine, and outdoor sectors. Adjusted EPS climbed 41% to $1.99, exceeding Wall Street expectations by 36.3%.
All five segments set revenue records, with auto OEM sales leading the way. Growth in the fitness products segment was fueled by the successful launch of new wearables. Garmin’s acquisition of JL Audio in 2023 enhanced its marine segment by introducing high-quality audio systems. Additionally, the shift toward premium technology improved its gross margin to 60%. The company projects fiscal 2024 revenue at around $6.12 billion, a growth of approximately 17%, while adjusted EPS is anticipated at $6.85, implying an annual rise of about 23%.
For the fiscal year ending in December, analysts expect Garmin’s EPS to increase 25.4% year over year to $7.01. The company’s record of beating earnings expectations has been impressive, consistently surpassing consensus estimates for the last four quarters.
Among the six analysts covering GRMN stock, the consensus rating is a “Hold.” This outlook includes one “Strong Buy” rating, two “Holds,” one “Moderate Sell,” and two “Strong Sells.”
The overall sentiment appears less bullish, as GRMN stock has received two new “Strong Sell” ratings within the last three months.
Last week, Bank of America Securities (BAC) raised GRMN’s price target from $150 to $185. This adjustment acknowledges the company’s strong performance and updates its 2024 EPS forecast to $6.85. Despite this increase, the firm maintained an “Underperform” rating, noting concerns that Garmin’s current valuation may already reflect its growth potential. While the company excels in niche markets and consistently outperforms projections, Bank of America’s cautious approach indicates worries about limited upside potential.
Currently, GRMN stock trades above the average price target of $186.80, but the highest target price of $215 suggests limited upside potential.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart
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