Garmin (NYSE:GRMN) - Share price, News & Analysis

Q: What is the Fair Price of GRMN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

GRMN ($100.61) is trading below our estimate of [[fair value]] ($202.63)

GRMN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

GRMN Stock Overview

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices in the Americas, the Asia Pacific, Australian Continent, Europe, the Middle East, and Africa.

Rewards

Trading at 50.3% below our estimate of its fair value

Earnings are forecast to grow 8.86% per year

Earnings have grown 13.5% per year over the past 5 years

Risk Analysis

Dividend of 2.9% is not well covered by earnings

Garmin Competitors

Sonos

NasdaqGS:SONO

US$2.5b

GoPro

NasdaqGS:GPRO

US$872.9m

Lennar

NYSE:LEN

US$22.1b

D.R. Horton

NYSE:DHI

US$25.5b

Price History & Performance

Summary of all time highs, changes and price drops for Garmin
Historical stock prices
Current Share Price	US$100.61
52 Week High	US$178.81
52 Week Low	US$92.53
Beta	1.02
1 Month Change	-3.82%
3 Month Change	-12.78%
1 Year Change	-31.94%
3 Year Change	27.78%
5 Year Change	100.02%
Change since IPO	906.10%

Recent News & Updates

Jun 08

Garmin: Please Keep A Potential Recession In Mind

While Garmin is growing its top line, earnings per share declined and especially free cash flow was plummeting in the first quarter of fiscal 2022. Management and analysts are expecting rather high growth for the years to come, but the looming recession is posing a huge risk for Garmin. Garmin might be fairly valued if we assume a mild impact from a potential recession, but overvalued in case of a steep recession.

Jun 03

Garmin (NYSE:GRMN) Has Announced That It Will Be Increasing Its Dividend To US$0.73

Garmin Ltd.'s ( NYSE:GRMN ) dividend will be increasing to US$0.73 on 30th of June. Based on the announced payment, the...

Shareholder Returns

	GRMN	US Consumer Durables	US Market
7D	1.6%	5.9%	0.7%
1Y	-31.9%	-29.6%	-18.4%

Return vs Industry: GRMN underperformed the US Consumer Durables industry which returned -28.3% over the past year.

Return vs Market: GRMN underperformed the US Market which returned -18.4% over the past year.

Price Volatility

Is GRMN's price volatile compared to industry and market?
GRMN volatility
GRMN Average Weekly Movement	4.4%
Consumer Durables Industry Average Movement	8.5%
Market Average Movement	8.2%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.4%

Stable Share Price: GRMN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: GRMN's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1989	18,700	Cliff Albert Pemble	https://www.garmin.com

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices in the Americas, the Asia Pacific, Australian Continent, Europe, the Middle East, and Africa. Its Fitness segment offers running and multi-sport watches; cycling products; activity tracking and smartwatch devices; and fitness and cycling accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms; and Connect IQ, an application development platform.

Garmin Fundamentals Summary

How do Garmin's earnings and revenue compare to its market cap?
GRMN fundamental statistics
Market Cap	US$19.30b
Earnings (TTM)	US$1.07b
Revenue (TTM)	US$5.08b

18.1x

P/E Ratio

3.8x

P/S Ratio

Is GRMN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GRMN income statement (TTM)
Revenue	US$5.08b
Cost of Revenue	US$2.17b
Gross Profit	US$2.91b
Other Expenses	US$1.84b
Earnings	US$1.07b

Last Reported Earnings

Mar 26, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.56
Gross Margin	57.28%
Net Profit Margin	21.12%
Debt/Equity Ratio	0%

How did GRMN perform over the long term?

See historical performance and comparison

Dividends

2.9%

Current Dividend Yield

52%

Payout Ratio

Does GRMN pay a reliable dividends?

See GRMN dividend history and benchmarks

When do you need to buy GRMN by to receive an upcoming dividend?
Garmin dividend dates
Ex Dividend Date	Sep 14 2022
Dividend Pay Date	Sep 30 2022
Days until Ex dividend	69 days
Days until Dividend pay date	85 days

Does GRMN pay a reliable dividends?

See GRMN dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is GRMN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GRMN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for GRMN. This is calculated by dividing GRMN's market cap by their current preferred multiple.
What is GRMN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$19.30b

GRMN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.2x
Enterprise Value/EBITDA	12.1x
PEG Ratio	2x

Price to Earnings Ratio vs Peers

How does GRMN's PE Ratio compare to its peers?

GRMN PE Ratio vs Peers

The above table shows the PE ratio for GRMN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.5x
SONO Sonos	17.4x	24.0%	US$2.5b
GPRO GoPro	2.3x	-25.7%	US$872.9m
LEN Lennar	5.1x	-7.5%	US$22.1b
DHI D.R. Horton	5x	-10.9%	US$25.5b
GRMN Garmin	18.1x	8.9%	US$19.3b

Forward PE

Price-To-Earnings vs Peers: GRMN is expensive based on its Price-To-Earnings Ratio (18.1x) compared to the peer average (7.5x).

Price to Earnings Ratio vs Industry

How does GRMN's PE Ratio compare vs other companies in the US Consumer Durables Industry?

Price-To-Earnings vs Industry: GRMN is expensive based on its Price-To-Earnings Ratio (18.1x) compared to the US Consumer Durables industry average (7.5x)

Price to Earnings Ratio vs Fair Ratio

What is GRMN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GRMN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.1x
Fair PE Ratio	15.2x

Price-To-Earnings vs Fair Ratio: GRMN is expensive based on its Price-To-Earnings Ratio (18.1x) compared to the estimated Fair Price-To-Earnings Ratio (15.2x).

Share Price vs Fair Value

What is the Fair Price of GRMN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GRMN ($100.61) is trading below our estimate of fair value ($202.63)

Significantly Below Fair Value: GRMN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: GRMN is poor value based on its PEG Ratio (2x)

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Future Growth

How is Garmin forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

8.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: GRMN's forecast earnings growth (8.9% per year) is above the savings rate (1.9%).

Earnings vs Market: GRMN's earnings (8.9% per year) are forecast to grow slower than the US market (13% per year).

High Growth Earnings: GRMN's earnings are forecast to grow, but not significantly.

Revenue vs Market: GRMN's revenue (7.2% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: GRMN's revenue (7.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: GRMN's Return on Equity is forecast to be high in 3 years time (21.1%)

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Past Performance

How has Garmin performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GRMN has high quality earnings.

Growing Profit Margin: GRMN's current net profit margins (21.1%) are lower than last year (23.9%).

Past Earnings Growth Analysis

Earnings Trend: GRMN's earnings have grown by 13.5% per year over the past 5 years.

Accelerating Growth: GRMN's earnings growth over the past year (2.2%) is below its 5-year average (13.5% per year).

Earnings vs Industry: GRMN earnings growth over the past year (2.2%) underperformed the Consumer Durables industry 39.2%.

Return on Equity

High ROE: GRMN's Return on Equity (17.2%) is considered low.

Discover strong past performing companies

Financial Health

How is Garmin's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: GRMN's short term assets ($4.1B) exceed its short term liabilities ($1.2B).

Long Term Liabilities: GRMN's short term assets ($4.1B) exceed its long term liabilities ($301.9M).

Debt to Equity History and Analysis

Debt Level: GRMN is debt free.

Reducing Debt: GRMN has not had any debt for past 5 years.

Debt Coverage: GRMN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: GRMN has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Garmin current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.90%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: GRMN's dividend (2.9%) is higher than the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: GRMN's dividend (2.9%) is low compared to the top 25% of dividend payers in the US market (4.27%).

Stability and Growth of Payments

Stable Dividend: GRMN's dividend payments have been volatile in the past 10 years.

Growing Dividend: GRMN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (52.3%), GRMN's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (113.4%), GRMN's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

14.8yrs

Average management tenure

CEO

Cliff Albert Pemble (56 yo)

14.75yrs

Tenure

US$4,238,341

Compensation

Mr. Clifton Albert Pemble, also known as Cliff, has been the Chief Executive Officer of Garmin Ltd., since January 1, 2013 and is its President since October 2007. Mr. Pemble serves as the Managing Directo...

CEO Compensation Analysis

Compensation vs Market: Cliff's total compensation ($USD4.24M) is below average for companies of similar size in the US market ($USD13.41M).

Compensation vs Earnings: Cliff's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: GRMN's management team is seasoned and experienced (14.8 years average tenure).

Board Members

Experienced Board: GRMN's board of directors are seasoned and experienced ( 13.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/06 00:00
End of Day Share Price	2022/07/06 00:00
Earnings	2022/03/26
Annual Earnings	2021/12/25