Garmin (NYSE: GRMN) — best known for its GPS devices – recently released its Q4 results, with earnings of $2.41 per share on sales of $1.82 billion, compared to the consensus estimates of $2.05 and $1.7 billion, respectively. Furthermore, the company’s outlook was above the expectations and its stock has surged to all-time high levels around $240 following the earnings release.
GRMN stock, with 91% returns since the beginning of 2024, has outperformed the S&P 500 index, up 28%. An uptick in profitability has boded well for its stock lately. But, if you want an upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
Image by Mario from Pixabay
Wearables Led The 23% Revenue Growth
Garmin’s revenue of $1.82 billion in Q4 reflected a 23% y-o-y jump. The Fitness segment was the standout performer, posting a 31% revenue increase to $539 million, driven by robust demand for wearable devices including the newly launched Lily 2 Active GPS watch. The Outdoor segment also showed impressive growth, with sales rising 29% to $629 million, boosted by recent product launches such as the Fenix 8, Enduro 3, Approach R50, and Descent X50i.
In other segments, Aviation revenue grew 9% to $237 million, supported by new partnerships involving the G3000 avionics system. Marine sales saw a modest 5% increase to $251 million, while Auto OEM revenue jumped 30% to $166 million, benefiting from increased adoption of Garmin’s Unified Cabin domain controller solution.
Strong Margins Fuel 40% Earnings Growth
Garmin’s financial performance showed strong improvement across multiple metrics in Q4. The company’s operating margin saw substantial expansion, rising 530 basis points to reach 28.3%. This margin improvement, combined with higher sales, drove a 40% year-over-year increase in earnings per share to $2.41.
Optimistic 8% Revenue Growth Outlook for 2025
Looking ahead to 2025, Garmin maintains an optimistic outlook, expecting to capitalize on both recent and upcoming product launches. The company’s guidance projects annual revenue of $6.8 billion, representing 8% growth, and adjusted earnings per share of $7.80, up 6% from the previous year. These forecasts slightly exceed Wall Street’s expectations of $6.7 billion in revenue and $7.77 in earnings per share.
GRMN Stock: Can You Handle the Volatility?
GRMN stock surged 13% post its Q4 results announcement. Volatility isn’t new for Garmin stock. Looking at a slightly longer timeframe, the increase in GRMN stock over the last four-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 15% in 2021, -30% in 2022, 43% in 2023, and 63% in 2024.
In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
What’s The Verdict – Should You Pick GRMN Stock At $240?
Given the current uncertain macroeconomic environment around rate cuts and ongoing trade wars, could GRMN face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months — or will it see a strong jump? From a valuation perspective, GRMN appears to be fully priced now.
At its current levels of near $240, GRMN stock is trading at 33x trailing earnings of $7.39 per share, around 50% higher than the stock’s average P/E ratio of 22x over the last five years. Although Garmin’s strong Q4 performance and favorable 2025 outlook help justify some of its recent valuation gains, the stock appears to be fully valued at current levels. Investors seeking robust long-term returns may find better entry points by waiting for a pullback.
While GRMN stock looks like it is fairly priced, it is helpful to see how Garmin’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
| Returns | Feb 2025 MTD [1] |
Since start of 2024 [1] |
2017-25 Total [2] |
| GRMN Return | 12% | 91% | 515% |
| S&P 500 Return | 1% | 28% | 173% |
| Trefis Reinforced Value Portfolio | -2% | 20% | 716% |
[1] Returns as of 2/20/2025
[2] Cumulative total returns since the end of 2016
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
