Garmin’s Q4 Success Pushes Stock Prices Higher as Wearables Market Expands
Garmin (NYSE: GRMN) reported impressive Q4 results and set optimistic guidance for 2025, leading to a surge in its stock price. The company’s consumer products, particularly in fitness and outdoor segments, showcased remarkable growth driven by rising demand for wearable technology.
Wearables, which include items such as smartwatches, jewelry, glasses, and virtual reality headsets, represent a rapidly growing market. This sector is expected to exceed $70 billion by the end of 2024, with a projected growth rate in the mid-teens for the next several years. This trend provides a significant boost not only for Garmin but also for its competitors in the wearable space.
Consumer Tech Firms Set to Thrive in 2025
Garmin faces competition from familiar names benefiting from the wearables trend. These include Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Logitech (NASDAQ: LOGI), and Ambarella (NASDAQ: AMBA). Apple continues to be a leader in portable technology, and despite slower iPhone sales in China during CQ4 2024, it anticipates revenue growth in 2025 with the launch of new products and advancements in artificial intelligence.
Meta Platforms has been pushing into virtual reality, gearing up for growth in 2025 through its improved Ray-Ban smart glasses sales. This product could attract a broader audience as virtual reality capabilities evolve, supported by its AI assistant integration.
Logitech, known for its computer peripherals, is strategically positioned in the wearables market. Its product range enhances consumer digital experiences, and the company reported steady growth in its F2024 results with a positive outlook for 2025.
Ambarella, while less prominent, is recognized for its advanced imaging technology used in wearables. After a rebound in F2025, the company is set for further growth leading into F2026, aiming for profitability by the next fiscal year.
Garmin’s Strong Performance Signals Continued Growth
Garmin’s Q4 results were robust, showcasing growth across all segments. The company reported net revenue of $1.82 billion, a 23% increase from the previous year, largely fueled by double-digit growth in its Fitness and Outdoor divisions, along with a notable 30% increase in Automotive OEM revenue. This strong performance has contributed positively to Garmin’s earnings growth.
Adjusted earnings climbed by 40% versus the previous year, significantly exceeding MarketBeat’s consensus forecast. Guidance for 2025 suggests high-single-digit revenue growth and earnings per share (EPS) projected around $7.80, further affirming confidence in upcoming earnings.
The company’s favorable cash flow and dedicated capital return policy have driven stock prices upward. Currently, Garmin’s dividend yield is approximately 1.25%, with its shares hitting all-time highs in mid-February, which is competitive with the S&P 500 average. A proposed 20% dividend increase for 2025 awaits board approval and represents less than 40% of the earnings outlook for that year, backed by a solid balance sheet.
Garmin Reaches New Heights: Upward Trend Continues
The stock price action indicates resistance at new all-time highs, yet Garmin has successfully set these new records. This momentum suggests an ongoing uptrend. However, there is a risk that these post-release highs may limit gains early in 2025. Nevertheless, increased institutional activity in the market, reflected by heightened buying and selling volumes, provides reassurance. Notably, Q1 saw significant institutional purchasing activity.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
