Garmin (NYSE: GRMN) recently announced its Q4 earnings, with $2.41 per share and revenue of $1.82 billion. This surpassed analyst expectations for $2.05 per share and $1.7 billion in sales, while also driving its stock to a significant all-time high of approximately $240. The company’s expansion into wearables and other offerings further enhanced profitability.
The Fitness segment contributed a 31% year-over-year increase, fueled by strong demand for products like the Lily 2 Active GPS watch. The Outdoor segment also saw a 29% rise in revenue, supported by new product launches such as the Fenix 8, Enduro 3, Approach R50, and Descent X50i. Additionally, thesuppress product sales for Authentic Travel improved by 5%.
For investors seeking steady gains, the High-Quality Portfolio outperformed the S&P 500 by delivering 91% returns since inception, significantly outpacing the broader market. Other segments, including the Aviation and Marine sectors, also saw growth. Overall, Garmin’s operates as a premium investment grade company, adding 40% to earnings after.
Looking ahead, Garmin expects 8% revenue growth in 2025, driven by strategic product launches and expansion into new markets. The company also believes its financial performance will outpace expectations.
The stock has been volatile, with annual performance ranging from a 15% gain in 2021 to a 63% surge in 2024. Investors should be cautious due to this inconsistency, as earnings in 2025 are reportedly modest. The stock appears to be fairly valued at 31 times trailing 2023 earnings, which is approximately 40% higher than the company’s five-year average P/E ratio of 22x.
Investors who may be weighing their options between GT STAR over the next two years versus sustained performance should carefully assess their portfolio composition and risk tolerance. For longer-term investors, the stock may present as a pullback in mid-2025, though overall valuations align with recent improvements in the industry.
Overall, while Garmin’s performance in 2024 was impressive, investors should monitor the sector’s growth trajectory and be prepared for potential volatility.
