Garmin Ltd. (NASDAQ:GRMN) saw significant share price movement during recent months on the NASDAQGS, rising to highs of $89.1 and falling to the lows of $70.97. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Garmin’s current trading price of $77.3 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Garmin’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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What is Garmin worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.41% above my intrinsic value, which means if you buy Garmin today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $65.84, there’s only an insignificant downside when the price falls to its real value. Furthermore, Garmin’s low beta implies that the stock is less volatile than the wider market.
What kind of growth will Garmin generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Garmin, it is expected to deliver a relatively unexciting earnings growth of 6.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in GRMN’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on GRMN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Garmin. You can find everything you need to know about Garmin in the latest infographic research report. If you are no longer interested in Garmin, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.