Garmin Still Leading Its Market

Garmin, Ltd. (GRMN - Analyst Report) is an OEM [original equipment manufacturer] of GPS-based equipment. June quarter results were short of the consensus on both the top and bottom lines. All segments were up double-digits in 2007, and are expected to be up again in 2008.

Pricing pressures continue to intensify, however, negating some of the growth in units. Management is optimistic about material prices offsetting ASP pressures in 2008. We see increasing revenue and gradually decreasing profitability for the company.

However, being a market leader, the company should fare better than most of the other smaller players. Consequently, we view the declining share price as an opportunity to accumulate shares. We reiterate our BUY rating.

Sejuti Banerjea contributed to this report.

Read the full analyst report on GRMN