Garmin logged a -0.3% change during today's morning session, and is now trading at a price of $99.73 per share.
Garmin returned losses of -8.0% last year, with its stock price reaching a high of $112.82 and a low of $76.37. Over the same period, the stock underperformed the S&P 500 index by -7.0%. As of April 2023, the company's 50-day average price was $97.83. 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. Based in Schaffhausen, Switzerland, the large-cap Industrials company has 19,700 full time employees. Garmin has not offered a regular dividend during the last year.
An Exceptionally Strong Balance Sheet:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $3,758 | $4,187 | $4,983 | $4,860 |
| Gross Margins | 59.4% | 59.3% | 58.0% | 57.8% |
| Operating Margins | 25.2% | 25.2% | 24.5% | 21.2% |
| Net Margins | 25.35% | 23.7% | 21.72% | 20.03% |
| Net Income (MM) | $952 | $992 | $1,082 | $974 |
| Net Interest Income | $52,817 | $37,002 | $28,573 | $40,826 |
| Depreciation & Amort. | -$106,175 | -$126,715 | -$154,818 | -$163,853 |
| Earnings Per Share | $4.99 | $5.17 | $5.61 | $5.19 |
| EPS Growth | n/a | 3.61% | 8.51% | -7.49% |
| Diluted Shares (MM) | 191 | 192 | 193 | 191 |
| Free Cash Flow (MM) | $578 | $948 | $703 | $542 |
| Capital Expenditures (MM) | -$120 | -$187 | -$310 | -$246 |
| Net Current Assets (MM) | $1,685 | $2,154 | $2,522 | $2,428 |
| Current Ratio | 2.95 | 3.15 | 2.94 | 3.26 |
| Net Debt / EBITDA | -0.83 | -1.09 | -1.03 | -0.92 |
Garmin has growing revenues and increasing reinvestment in the business, strong margins with a stable trend, and an excellent current ratio. The company also benefits from low leverage, wider gross margins than its peer group, and positive EPS growth.
Garmin's Valuation Is in Line With Its Sector Averages:
Garmin has a trailing twelve month P/E ratio of 18.8, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $5.82, the company has a forward P/E ratio of 16.8. The 3.1% compound average growth rate of Garmin's historical and projected earnings per share yields a PEG ratio of 6.03. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing Garmin in terms of its equity because its P/B ratio is 3.08 while the sector average is 3.78. The company's shares are currently trading 61.4% above their Graham number.
Analysts Give Garmin an Average Rating of Hold:
The 4 analysts following Garmin have set target prices ranging from $99.0 to $130.0 per share, for an average of $111.25 with a hold rating. As of April 2023, the company is trading -12.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Garmin has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 54.0% of the company's shares, and the insider ownership rate stands at 19.94%, suggesting a large amount of insider shareholders. The largest shareholder is the Vanguard Group, Inc., whose 9% stake in the company is worth $1,778,965,449.
