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Valued at a market cap of $46.4 billion, Garmin Ltd. (GRMN) develops, manufactures, markets, and distributes a range of wireless devices. The Schaffhausen, Switzerland-based company’s portfolio includes smartwatches, fitness trackers, navigation systems, and specialized equipment for pilots, athletes, and outdoor enthusiasts.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and Garmin fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the scientific & technical instruments industry. The company is known for combining precision navigation with innovative design. With its reputation for reliability and cutting-edge technology, Garmin has established itself as a leader in global positioning solutions and lifestyle wearables.
This GPS-enabled wireless devices manufacturer is currently trading 2.2% below its 52-week high of $246.50, reached on Feb. 19. Moreover, shares of Garmin have soared 15.3% over the past three months, slightly outperforming the iShares Future Metaverse Tech And Communications ETF's (IVRS) 15.1% return during the same time frame.
Moreover, in the longer term, Garmin has rallied 32% over the past 52 weeks, outpacing IVRS’ 29.4% uptick over the same time period. However, on a YTD basis, shares of GRMN are up 16.9%, lagging behind IVRS’ 26.6% rise.
To confirm its bullish trend, Garmin has been trading above its 200-day moving average over the past year, with slight fluctuations, and has remained above its 50-day moving average since mid-May.
Garmin posted its Q2 results on Jul. 30. The company reported record revenue of $1.8 billion, up 20.4% year-over-year and 4% ahead of the consensus estimates. A robust increase in sales across all its reportable segments supported its top-line. Moreover, its pro forma EPS of $2.17 grew by an even more impressive 37.3% from the prior-year quarter and came in 10.7% above analyst estimates. However, compared to the same quarter last year, its cash flow from operations dropped 14% to $594 million. In comparison, its free cash flow declined by a notable 41.6% to $127.5 million, reflecting higher receivables and unsold inventories. These concerns overshadowed the otherwise strong results, leading to a 7.4% decline in the share price following the earnings release.
Garmin has lagged behind its rival, Trimble Inc. (TRMB), which soared 50.9% over the past 52 weeks and 17.3% on a YTD basis.
Despite Garmin’s recent outperformance, analysts remain cautious about its prospects. The stock has a consensus rating of "Hold” from the eight analysts covering it. While the company is trading above its mean price target of $214.60, its Street-high price target of $285 suggests an 18.2% premium to its current price levels.
On the date of publication, Neharika Jain 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.
