Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Garmin Ltd.'s (NASDAQ:GRMN) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
How Did GRMN's Recent Performance Stack Up Against Its Past?
GRMN's trailing twelve-month earnings (from 30 March 2019) of US$705m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10%, indicating the rate at which GRMN is growing has accelerated. What's the driver of this growth? Let's see whether it is only attributable to industry tailwinds, or if Garmin has seen some company-specific growth.
In terms of returns from investment, Garmin has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 12% exceeds the US Consumer Durables industry of 6.8%, indicating Garmin has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Garmin’s debt level, has increased over the past 3 years from 15% to 17%.
What does this mean?
Garmin's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Garmin to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GRMN’s future growth? Take a look at our free research report of analyst consensus for GRMN’s outlook.
- Financial Health: Are GRMN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.