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Bull of the Day: Garmin (GRMN)

Madeleine Johnson

Garmin Ltd. (GRMN) is a tech company that, over the years, has pioneered new GPS navigation and wireless devices and applications designed for people who live an active lifestyle. Garmin has five primary business units: automotive, aviation, fitness, marine, and outdoor recreation.

Strong Q4 Performance

The GPS technology company beat estimates on both the top and bottom line.

Earnings of $1.02 easily surpassed the Zacks Consensus Estimate of 79 cents per share, while revenues of $932 million grew 4% year-over-year.

Despite a 28% decline in its automotive segment revenue, Garmin’s aviation, marine, outdoor, and fitness products climbed a combined 13%, which helped offset the automotive underperformance.

Notably, outdoor product revenue grew 25% thanks to Garmin’s adventure watch lines.

In the company’s earnings release, CEO Cliff Pemble said that 2018 was a remarkable year of revenue and operating income growth.” He continued, “Entering 2019, we see many opportunities ahead and believe that we are well positioned to seize these opportunities with a strong lineup of products across all of our segments."

GRMN is Gaining

Garmin Ltd. Price and Consensus

Garmin Ltd. Price and Consensus | Garmin Ltd. Quote

Year-to-date, shares of GRMN are up 41% compared to the S&P 500’s return of almost 16%.

Along with strong Q4 results, Garmin announced upbeat forward guidance for 2019.

For full-year 2019, the company projects revenues of $3.5 billion, up from $3.35 billion seen last year and above consensus estimates of $3.43 billion. Earnings are expected to come in at $3.70 per share for the year, well above the $3.52 Wall Street had been looking for.

Estimates, thus, have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).

For the current fiscal year, four analysts have revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has jumped 24 cents during that same time period. Earnings growth is expected to remain positive year-over-year.

2020 looks pretty strong as well, and earnings are expected to grow as well; next year’s consensus estimate has moved 13 cents higher from $3.70 to $3.83, with one upward revision in the last 60 days.

GRMN does report its next quarterly results right at the beginning of May, so be aware that the company’s current outlook could be impacted.

But, thanks to high consumer demand, steady sales and a strong product portfolio, the future is looking bright for Garmin. If you’re an investor looking for a tech stock to add to your portfolio, make sure to keep GRMN on your shortlist.

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