Now trading at a price of $125.8, Garmin has moved -0.3% so far today.
Garmin returned gains of 39.7% last year, with its stock price reaching a high of $126.99 and a low of $89.25. Over the same period, the stock outperformed the S&P 500 index by 16.1%. More recently, the company's 50-day average price was $114.8. 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 offered a 2.3% dividend yield over the last 12 months.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $3,347 | $3,758 | $4,187 | $4,983 | $4,860 | $5,052 |
| Revenue Growth | n/a | 12.25% | 11.42% | 19.02% | -2.46% | 3.95% |
| Operating Margins | 25% | 26% | 26% | 24% | 22% | 23% |
| Net Margins | 21% | 25% | 24% | 22% | 20% | 21% |
| Net Income (MM) | $694 | $952 | $992 | $1,082 | $974 | $1,041 |
| Net Interest Expense (MM) | $45 | $53 | $49 | $29 | $41 | $128 |
| Depreciation & Amort. (MM) | $65 | $72 | $78 | $103 | $119 | $129 |
| Earnings Per Share | $3.66 | $4.99 | $5.17 | $5.61 | $5.04 | $5.42 |
| EPS Growth | n/a | 36.34% | 3.61% | 8.51% | -10.16% | 7.54% |
| Diluted Shares (MM) | 198,077 | 198 | 192 | 193 | 192 | 191 |
| Free Cash Flow (MM) | $764 | $581 | $950 | $705 | $544 | $1,075 |
| Capital Expenditures (MM) | $156 | $118 | $185 | $308 | $244 | $204 |
| Current Ratio | 2.89 | 2.95 | 3.15 | 2.94 | 3.26 | 3.13 |
Garmin has growing revenues and increasing reinvestment in the business, strong margins with a stable trend, and low leverage. However, the firm suffers from EPS growth achieved by reducing the number of outstanding shares and irregular cash flows.
Garmin's Valuation Is in Line With Its Sector Averages:
Garmin has a trailing twelve month P/E ratio of 21.2, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $5.67, the company has a forward P/E ratio of 20.2. The 6.5% compound average growth rate of Garmin's historical and projected earnings per share yields a PEG ratio of 3.28. 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 3.79 while the sector average is 4.06.
There's an Analyst Consensus of Little Upside Potential for Garmin:
The 6 analysts following Garmin have set target prices ranging from $100.0 to $135.0 per share, for an average of $120.11 with a hold rating. As of April 2023, the company is trading -4.4% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Garmin has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 56.9% of the company's shares, and the insider ownership rate stands at 19.89%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $2,246,707,039.
