Garmin Rises 45% in a Year: Is it the Right Time to Buy the Stock?

Garmin GRMN stock has gained 45.3% the past year, outperforming the Zacks Computer and Technology sector, The Technology Select Sector SPDR Fund XLK, and the S&P 500 index’s return of 5.7%, 1.4% and 8.6%, respectively.The company has outperformed the Zacks Electronics - Miscellaneous Products industry, which declined  47.7% in the same time frame.Although Garmin’s outperformance reflects investors’ confidence in Garmin’s robust product portfolio and strong financials, it also raises the question: Should investors buy Garmin shares in anticipation of continued stock price momentum?Garmin’s 1-Year Price Return PerformanceImage Source: Zacks Investment ResearchFitness Products Drive Garmin’s GrowthGarmin is one of the most prominent players in the fitness technology market, which is highly fragmented due to the presence of numerous players, including Coros, Huawei, Oura, Polar, Samsung, Suunto, Whoop and tech heavyweights like Apple AAPL and Alphabet GOOGL.Flagship products like Apple Watch Series 10, Apple Ultra 2, Alphabet’s Google Fitbit Charge 6, Coros Pace Pro, Oura Ring, Polar Pacer are comparable with Garmin’s fitness watches and wearables like Garmin heart rate monitors.However, Garmin stands out from other industry players by offering fitness wearables tailored to specific activities, such as swim, dive, multisport, and golf watches. These sport-specific features provide professionals with more precise performance metrics than other brands.Garmin also differentiates itself by venturing beyond fitness wearables by offering smart scales and handheld smart blood pressure monitors, making its products a preferred choice among fitness enthusiasts.Over the past decade, Garmin’s fitness segment has grown to be the second-largest contributor to its total revenues. In 2024, the Fitness segment’s revenues grew 32% year over year. Our estimates suggest that the Fitness segment is expected to witness a CAGR of 8.4% from 2025 to 2027.Strong Outdoor and Marine Business Aids GarminGarmin has a very strong Outdoor product portfolio comprising bike computers, smart biking trainers, bike radars, golf launch monitors and many other sport-specific technologies. The Outdoor segment also features Garmin’s flagship watch series like Fenix, Instinct and Tactix.Its Marine portfolio includes SONAR systems, dive computers, trolling motors, sensors, marine apps and first responder solutions. In 2024, the Marine segment revenues surpassed $1 billion for the first time, joining the Fitness and Outdoor segments.Alongside hardware, Garmin provides subscription-based services on its connected devices. Subscription services, including Garmin’s inReach Satellite solution, Navionics for marine navigation, Garmin Connect Premium and Outdoor Maps+, add to its recurring revenues.Strong performance across its three biggest segments — Fitness, Outdoor and Marine — has led the company to initiate 2025 revenue guidance of approximately $6.80 billion. The Zacks Consensus Estimate for Garmin’s 2025 revenues is pegged at $6.87 billion, indicating year-over-year growth of 9%.Recovery in Garmin’s Aviation and Auto OEM SegmentGarmin’s Auto OEM market segment is on the path of recovery. The segment has registered an operating loss in the past five years. However, as Garmin secured additional contracts from its largest automotive customer, BMW Group, its Auto OEM revenue soared 44% year-over-year narrowing the operating loss.In the aviation market, Garmin has carved a niche for its integrated flight decks, portable GPS navigators, electronic flight instruments, runway occupancy awareness technology and emergency auto land systems. Garmin expects aviation revenues to grow by approximately 5% in 2025.Garmin’s 2025 Earnings Estimates Show Upward TrendThe Zacks Consensus Estimate for Garmin’s 2025 earnings is pegged at $8.25 per share, which has revised upward over the past seven days. The figure calls for a year-over-year increase of 11.6%.Garmin beat the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 28.85%.Garmin Ltd. Price, Consensus and EPS Surprise Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. QuoteFind the latest EPS estimates and surprises on Zacks Earnings Calendar.Garmin Shares Trade at PremiumGarmin is trading at a premium, as suggested by a Value Score of F.Garmin has a 12-month forward P/E ratio of 26.01X, which is much higher than the industry’s 12-month forward P/E ratio of 9.32.Garmin 12-month forward P/E RatioImage Source: Zacks Investment ResearchConclusion: Buy Garmin Stock NowRobust traction in Garmin’s Fitness, Outdoor and Marine products will be the key growth driver for GRMN in the upcoming quarters. Garmin is also experiencing a recovery in its Auto OEM and Aviation end markets.Garmin sports a Zacks Rank #1 (Strong Buy) at present, which implies that it will be prudent to accumulate the stock at present. You can see the complete list of today’s Zacks #1 Rank stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Garmin Ltd. (GRMN): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks