Key Factors

  • Garmin is a number one supplier of GPS and smartwatch health trackers.
  • The corporate posted document first-quarter revenues in its Health, Open air, Aviation, and Marine segments and reaffirmed full-year 2024 steering.
  • At its annual assembly on June 7, 2024, Garmin will vote on a $3.00 annual money dividend paid out in equal quarterly distributions.
  • 5 shares we like higher than Garmin

Garmin Ltd. NYSE: GRMN launched in 1989 with the only focus of offering GPS gadgets for customers. Years later, the arrival of smartphone GPS apps like Google Maps, Apple Maps, and Waze may have spelled loss of life for the corporate. Nonetheless, the pc and know-how sector large has thrived by branching out to change into one of many largest suppliers of smartwatches and health trackers. 

Devoted GPS

Whereas commuters and customers are used to utilizing a smartphone navigation app, Garmin customers love having a dedicated GPS that doesn’t rely on cellular connectivity. The benefits of having a devoted GPS embrace higher battery life, extra protection and knowledge privateness. Because it makes use of satellite tv for pc monitoring and preloaded maps, Garmin GPS gadgets can be utilized within the wild the place there are not any mobile towers. This is the reason Garmin GPS is commonly the model of alternative with boaters, pilots, hikers, and fishermen who routinely traverse rural and distant places.

Flourishing Wearables Enterprise

Garmin has change into a favourite amongst smartwatch customers, notably for health monitoring. Runners, swimmers, cyclists and gymnasium rats love Garmin smartwatches to trace energy and measure pulse, resting coronary heart fee, coronary heart fee variability (HRV), stationary time and hourly exercise. For ladies, its purpose-built smartwatches function menstrual cycle monitoring, being pregnant monitoring, sleep rating, physique battery, and stress rating monitoring. Garmin continues to roll out options and next-gen variations of its smartwatches.

 Day by day Bull Flag Breakout

GRMN shaped a each day bull flag breakout sample. The previous flagpole run-up peaked at $149.50 earlier than the parallel higher and decrease trendlines generated a reversion all the way down to $138.86. GRMN shares bounced and broke by way of the $144.54 higher trendline resistance heading into its Q1 2024 earnings launch. The report triggered a spot as much as $151, which floor as much as a  $166.44 swing excessive. The each day relative energy index (RSI) surged to the overbought 82-band. Pullback help ranges are at $153.33, $144.84, $134.11 and $123.46.

Strong Q1 2024 Outcomes

Garmin crushed Q1 2024 EPS, reporting $1.42 versus $1.01 consensus analyst, a 41-cent beat. Working revenue grew 51% YoY to $298 million. Revenues surged 20.4% YoY to $1.38 billion, crushing the $1.25 billion consensus estimates. Gross margins expanded to 58.1% and working margins to 21.6%. Garmin was named Provider of the 12 months by Impartial Construct Builder Inc.

Section Development 

$169.98

+2.10 (+1.25%)

(As of 05/7/2024 ET)

52-Week Vary
$99.61

$170.87

Dividend Yield
1.72%

P/E Ratio
23.97

Worth Goal
$153.50

The corporate hit document first-quarter revenues in 4 of its segments — Health, Open air, Aviation, and Marine — and in addition noticed a rise in its Auto Origination Tools Producer (OEM) phase.

The Health phase revenues surged 40% YoY to $343 million, pushed by the sturdy demand amongst athletes for its newly launched Forerunner 165 sequence. Its Out of doors phase revenues rose 11% YoY to $366 million, leading to $107 million in working revenue. The Aviation phase had a 2% improve in gross sales pushed by progress in OEM merchandise. Its Marine phase revenues rose 17% YoY to $327 million, primarily pushed by the acquisition of JL Audio.

Garmin’s Auto OEM phase noticed a 58% YoY improve to $129 million, pushed by elevated area controller shipments to BMW. Whereas the gross margin was 18%, the corporate recorded a lack of $16 million within the quarter.

Reaffirmed Steering

Dividend Yield
1.72%

Annual Dividend
$2.92

Dividend Improve Observe Document
1 12 months

Annualized 3-12 months Dividend Development
6.76%

Dividend Payout Ratio
41.18%

Subsequent Dividend Cost
Sep. 27

See Full Particulars

Garmin reaffirmed its full-year 2024 steering of professional forma EPS of $5.40 to $5.44 consensus estimates. Full-year revenues are anticipated to be round $5.75 billion versus $5.73 billion consensus estimates. The Board recommends a $3.00 dividend paid out in 4 quarterly funds of 75 cents per share, and the vote will likely be held on the annual assembly on June 7, 2024.

Upbeat CEO Insights

Garmin CEO Clifton Pemble famous that the constructive traits concluding 2023 had been strengthened in Q1 2024. Pemble reminded analysts that the primary quarter is usually the low level of seasonal gross sales and, as such, will simply reaffirm its prior steering.

Pemble commented, “ Our merchandise are distinctive, extremely differentiated in comparison with quite a lot of merchandise which might be in the marketplace. So individuals look to our merchandise for explicit inspiration round exercise, however sports activities wellness, all these issues is one thing that we’re recognized for. So we’re undoubtedly seeing individuals respect our merchandise for these issues. Registrations have been sturdy. So we’re seeing that observe by way of at retail, and we nonetheless see the vast majority of our customers which might be coming in as new customers to Garmin versus repeat.”

Garmin analyst forecasts and worth targets are on MarketBeat.

Whereas Garmin at present has a “Maintain” ranking amongst analysts, top-rated analysts imagine these 5 shares are higher buys.

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