Now trading at a price of $171.84, Garmin has moved -5.6% so far today.
Garmin returned gains of 72.2% last year, with its stock price reaching a high of $184.42 and a low of $99.61. Over the same period, the stock outperformed the S&P 500 index by 46.5%. More recently, the company's 50-day average price was $173.13. Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Based in Schaffhausen, Switzerland, the Large-Cap Industrials company has 19,900 full time employees. Garmin has offered a 1.6% dividend yield over the last 12 months.
Wider Gross Margins Than the Industry Average of 34.68%:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,347 | $3,758 | $4,187 | $4,983 | $4,860 | $5,228 |
| Gross Margins | 59% | 59% | 59% | 57% | 57% | 56% |
| Net Margins | 21% | 25% | 24% | 22% | 20% | 25% |
| Net Income (M) | $694 | $952 | $992 | $1,082 | $974 | $1,290 |
| Net Interest Expense (M) | $45 | $53 | $37 | $29 | n/a | $77 |
| Depreciation & Amort. (M) | $65 | $72 | $78 | $103 | $119 | $132 |
| Diluted Shares (M) | 190 | 191 | 192 | 193 | 193 | 192 |
| Earnings Per Share | $3.66 | $4.99 | $5.17 | $5.61 | $5.04 | $6.71 |
| EPS Growth | n/a | 36.34% | 3.61% | 8.51% | -10.16% | 33.13% |
| Avg. Price | $55.12 | $74.83 | $89.74 | $135.64 | $108.02 | $171.51 |
| P/E Ratio | 14.98 | 14.94 | 17.29 | 24.09 | 21.35 | 25.45 |
| Free Cash Flow (M) | $764 | $581 | $950 | $705 | $544 | $1,183 |
| CAPEX (M) | $156 | $118 | $185 | $308 | $244 | $194 |
| Current Ratio | 2.89 | 2.95 | 3.15 | 2.94 | 3.26 | 3.41 |
Garmin benefits from growing revenues and increasing reinvestment in the business, generally positive cash flows, and an excellent current ratio of 3.41. The company's financial statements show wider gross margins than its peer group and a strong EPS growth trend.
a Very Low P/E Ratio but Its Shares Are Expensive:
Garmin has a trailing twelve month P/E ratio of 24.2, compared to an average of 25.19 for the Industrials sector. Based on its EPS guidance of $6.61, the company has a forward P/E ratio of 26.2. The 8.8% compound average growth rate of Garmin's historical and projected earnings per share yields a PEG ratio of 2.75. This suggests that these shares are overvalued. Furthermore, Garmin is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.72 is higher than the sector average of 3.17. The company's shares are currently trading 131.5% below their Graham number. Ultimately, Garmin's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Analysts Give Garmin an Average Rating of Hold:
The 5 analysts following Garmin have set target prices ranging from $118.0 to $181.0 per share, for an average of $148.28 with a hold rating. The company is trading 15.9% away from its average target price, indicating that there is an analyst belief that shares are overpriced.
Garmin has a very low short interest because 1.9% of the company's shares are sold short. Institutions own 56.0% of the company's shares, and the insider ownership rate stands at 19.54%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $3,045,409,829.
