Barclays Downgrades Garmin to Underweight, Shares Fall 2%

Garmin (NYSE:GRMN) surged more than 14% intra-day today after posting better-than-expected fourth-quarter results, with both earnings and revenue surpassing analyst estimates, alongside an upbeat forecast for 2025.

For Q4, the GPS technology leader reported adjusted earnings per share of $2.41, beating expectations of $1.91 by 26%. Revenue surged 23% year-over-year to $1.82 billion, well ahead of the $1.65 billion consensus forecast.

The company credited its record-setting year to strong performance across all five of its business segments, marking historic highs in revenue and operating income for the full year.

Looking ahead, Garmin provided a bullish outlook for 2025, forecasting full-year revenue of approximately $6.80 billion, above analysts' $6.72 billion projection. The company also expects EPS of around $7.80, reflecting continued profitability and operational strength.

Garmin saw broad-based momentum in Q4, with fitness revenue jumping 31% to $539.3 million and outdoor segment sales rising 29% to $629.4 million. The company also expanded its gross margin to 59.3% from 58.3% a year earlier, highlighting improved efficiency and pricing power.

• Garmin Ltd. (NYSE:GRMN) is expected to report an EPS of $1.90 and revenue of approximately $1.7 billion for the upcoming quarter.
• The company has a history of exceeding earnings expectations, with an average surprise of 28.51% over the past four quarters.
• Garmin's financial health is solid, with a low debt-to-equity ratio of 0.0146 and a current ratio of 3.30, indicating strong liquidity.

Garmin Ltd. (NYSE:GRMN) is a well-known player in the technology sector, specializing in GPS technology and wearable devices. The company operates across various segments, including fitness, marine, aviation, auto OEM, and outdoor markets. Garmin faces competition from companies like Fitbit and TomTom, but it has carved out a strong niche with its diverse product offerings.

On February 19, 2025, Garmin is set to release its quarterly earnings before the market opens. Analysts expect the earnings per share (EPS) to be $1.90, with revenue projected at approximately $1.7 billion. This aligns closely with the Zacks Consensus Estimate, which anticipates an EPS of $1.89, marking a 9.88% increase from the previous year.

Garmin has a track record of exceeding earnings expectations, with an average surprise of 28.51% over the past four quarters. The projected revenue of $1.68 billion for the fourth quarter reflects a 13.42% year-over-year growth. This growth is likely driven by strong demand in the fitness segment, particularly for advanced wearable technology.

The company's financial metrics provide further insight into its performance. Garmin's price-to-earnings (P/E) ratio is approximately 26.92, indicating the price investors are willing to pay for each dollar of earnings. Its price-to-sales ratio stands at about 6.85, reflecting the market's valuation of its revenue.

Garmin's financial health is underscored by its low debt-to-equity ratio of 0.0146, highlighting minimal reliance on debt financing. The current ratio of 3.30 suggests strong liquidity, indicating the company's ability to cover short-term liabilities with its short-term assets. These metrics, combined with a stable EPS estimate, position Garmin favorably in the market.

• Garmin Ltd. (NYSE:GRMN) stock price surged by 26.03% following an impressive earnings report.
• The company reported a 24% year-over-year increase in sales and a 41% rise in earnings.
• Despite a high-profile share sale by Managing Director Sean Biddlecombe, Garmin maintains strong market momentum and investor confidence.

Garmin Ltd. (NYSE:GRMN) is a well-known company specializing in personal navigation devices and technology products for outdoor recreation, navigation, and fitness. The company has been experiencing a significant surge in its stock price, driven by strong financial performance and an optimistic outlook. Garmin's competitors include companies like TomTom and Fitbit, but Garmin has managed to maintain a strong market position.

On November 7, 2024, Sean Biddlecombe, Managing Director, EMEA for Garmin, sold 587 shares at approximately $210.10 each. Despite this sale, Biddlecombe still holds 6,147 shares. This transaction comes at a time when Garmin's stock is experiencing upward momentum, supported by positive revisions in earnings estimates and a strong correlation between these revisions and stock price movements.

Garmin's stock price recently surged by 26.03% in a single day, following the release of its earnings report on October 30. The stock jumped from $166.27 to $204.92, driven by a 24% year-over-year increase in sales and a 41% rise in earnings. These impressive results exceeded expectations and contributed to the stock's breakout, as highlighted by FXEmpire.

The current price of Garmin's stock is $210.63, with a slight increase of 0.46% today. The stock has fluctuated between $209.53 and $212.275, marking its highest price over the past year. Garmin's market capitalization stands at approximately $40.45 billion, with a trading volume of 404,351 shares. The company's strong financial performance and revised guidance continue to boost investor confidence.

Garmin (NYSE:GRMN) saw its shares rise more than 23% intra-day on Wednesday after reporting third-quarter earnings that significantly outpaced expectations and raising its full-year forecast.

The GPS technology leader posted adjusted earnings per share of $1.99, beating Street estimates by $0.55. Revenue reached $1.59 billion, surpassing the anticipated $1.44 billion and marking a robust 24% year-over-year increase.

Growth was broad-based across Garmin’s segments, with fitness revenue surging 31% and outdoor revenue up 21%. The company’s gross margin expanded to 60%, while its operating margin improved to 27.6%.

Looking forward, Garmin raised its full-year revenue outlook to $6.12 billion, above its prior guidance and surpassing the $5.988 billion consensus. The company also increased its adjusted EPS forecast to $6.85, well above Wall Street projections of $6.08.

Analysts from JPMorgan changed their rating for Garmin (NYSE:GRMN) from Overweight to Neutral, setting a price target of $135.00. According to the analysts, the downgrade is due to anticipated limited growth potential, following an adjustment of their revenue projections. This adjustment is based on a cautious view of consumer spending after a strong holiday season, influenced by new product releases and inventory buildup.

Additionally, the earnings forecast has been significantly lowered due to the potential impact of a higher corporate tax rate in Switzerland, which might affect earnings per share by approximately 30 cents. Despite this, the December 2024 price target remains at $135, calculated at about 23 times the target multiple, aligning with Garmin's recent trading multiple and slightly below the current near-term multiple.

This valuation is supported by a Sum-of-the-Parts (SOTP) analysis, with Garmin's traditional hardware segments valued between 20 to 25 times, while the Auto OEM segment is valued lower, at around 15 times, reflecting its alignment with automotive sector peers and considering the risks related to customer concentration and financial challenges during its growth phase.