Garmin (GRMN) Investors Look for Path Forward

Garmin has moved -1.1% so far today on a volume of 577,343, compared to its average of 992,077. In contrast, the S&P 500 index moved -0.9%.

Over the last 52 weeks, the stock has seen a high of $138.25 and a low of $76.37 while lagging the S&P 500 index by -14.2%. Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices in the Americas, the Asia Pacific, Australian Continent, Europe, the Middle East, and Africa. The large-cap Technology company has 18,700 full time employees and is based in Schaffhausen, Switzerland. Garmin has returned a 3.1% dividend yield over the last 12 months.

Snapshot of the Company's Income Statement, Balance Sheet, and Cash Flows:

2018-12-29 2019-12-28 2020-12-26 2021-12-25
Revenue $3,347,444,000 $3,757,505,000 $4,186,573,000 $4,982,795,000
Gross Margins 59.14% 59.45% 59.27% 58.01%
Gross Margins Growth n/a 0.52% -0.3% -2.13%
Operating Margins 23.25% 25.17% 25.18% 24.46%
Operating Margins Growth n/a 8.26% 0.04% -2.86%
Earnings Per Share $3.66 $4.99 $5.17 $5.61
EPS Growth n/a 36.34% 3.61% 8.51%
Free Cash Flow $763,765,000 $580,518,000 $949,866,000 $704,782,000
FCF Growth n/a -23.99% 63.62% -25.8%

Basic Valuation Metrics:

Compared to the Technology sector's average of 26.5, Garmin has a trailing twelve month price to earnings (P/E) ratio of 18.3 and, based on its Eps guidance of 5.43, an expected P/E ratio of 16.9. The firm's price to earnings growth (PEG) is 1.65, which indicates that it is overvalued in terms of its expected rate of earnings growth. . Garmin's price to book (P/B) ratio is 3.0 compared to its sector average of 5.57.

As of the date of publication, the company is trading 56.3% above its fair value as expressed by Benjamin Graham's formula. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 5 * 30.587) = $58.66

Sentiment Overview:

The company has a very low short interest since 1.1% of the company's shares are tied to short positions. Institutions own 55.5% of Garmin's shares, while the insider ownership rate stands at 19.97%. The biggest shareholder is Vanguard Group, Inc. with a 8.98% stake in the company worth approximately $1,631,277,070.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.