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Garmin (GRMN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Garmin (GRMN) closed at $84.97 in the latest trading session, marking a +1.61% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.42%. Elsewhere, the Dow gained 1.42%, while the tech-heavy Nasdaq added 1.4%.

Coming into today, shares of the maker of personal navigation devices had gained 0.69% in the past month. In that same time, the Computer and Technology sector gained 1.95%, while the S&P 500 gained 0.38%.

Wall Street will be looking for positivity from GRMN as it approaches its next earnings report date. This is expected to be October 30, 2019. In that report, analysts expect GRMN to post earnings of $0.94 per share. This would mark a year-over-year decline of 6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $863.92 million, up 6.66% from the year-ago period.

GRMN's full-year Zacks Consensus Estimates are calling for earnings of $3.90 per share and revenue of $3.60 billion. These results would represent year-over-year changes of +5.69% and +7.58%, respectively.

Any recent changes to analyst estimates for GRMN should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. GRMN is currently a Zacks Rank #1 (Strong Buy).

Digging into valuation, GRMN currently has a Forward P/E ratio of 21.47. Its industry sports an average Forward P/E of 20.86, so we one might conclude that GRMN is trading at a premium comparatively.

Also, we should mention that GRMN has a PEG ratio of 2.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Electronics - Miscellaneous Products was holding an average PEG ratio of 1.67 at yesterday's closing price.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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