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Garmin Boosts Outdoor Segment: Should You Buy, Hold or Sell the Stock?

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Garmin (GRMN - Free Report) recently unveiled the inReach Messenger Plus, its first satellite communicator. The communicator includes photo and voice messaging, in addition to global two-way texting, location sharing and SOS functions.

Garmin’s inReach devices are known for their durable, temperature-resistant design, ideal for outdoor areas without cell coverage. The inReach Messenger Plus features weeks of battery life and offers reliable satellite communication as a standalone device or paired with the Garmin Messenger app.

The latest device expands GRMN’s Outdoor portfolio. It has been benefiting from strong top-line growth, driven by a solid portfolio across various business segments, including Outdoor, Fitness, Aviation and Marine. 

This has driven GRMN's share price on a year-to-date basis. 

The stock has appreciated 32.2% YTD compared with the Electronics Miscellaneous industry’s return of 12.8%. It has also outpaced the Zacks Computer & Technology sector’s return of 19.5%.
 

Garmin Ltd. Price and Consensus

 

Garmin Ltd. Price and Consensus

Garmin Ltd. price-consensus-chart | Garmin Ltd. Quote

 

Garmin’s efforts toward product innovation, diversification and market expansion are driving performance in its segments, especially Fitness, Marine and Auto OEM.

But do these efforts make GRMN stock attractive for investors? Let’s analyze.

Expanding Portfolio Aids Garmin’s Prospects

The company expanded its Marine segment with the GPSMAP 9500 Black Box System, which offers superior processing performance. This enhancement improves all onboard sensors — sonar, radar, cameras and digital switching — ensuring comprehensive connectivity and a better user experience.

GRMN recently launched the GC 245 and GC 255 marine cameras to enhance proximity awareness while docking. With on-screen distance markers and guidance lines, these cameras improve visibility from the helm, ensuring peace of mind during low-speed maneuvers in tight spaces.

Garmin’s Dash Cam X series offers high-quality, discreet eyewitness coverage for drivers. The Dash Cam Mini 3, X110, X210 and ultra-clear X310 deliver up to 4K Ultra HD video resolution, providing reliable evidence for road incidents.

GRMN’s robust Fitness portfolio, featuring new wearable launches, bolsters Garmin's competitive prowess against major players such as Apple (AAPL - Free Report) , Fitbit parent Alphabet (GOOGL - Free Report) , Samsung and Huawei.

Garmin’s new fenix 8 Series offers premium multisport GPS smartwatches with bright AMOLED or solar charging displays for extended battery life. With advanced features like a built-in speaker, microphone and LED flashlight, these smartwatches help users achieve their health and fitness goals.

Garmin recently launched the Enduro 3, a lightweight ultraperformance GPS smartwatch featuring premium training and navigation capabilities with extended battery life. Its larger solar lens delivers over double the solar power, allowing athletes to run longer distances.

GRMN’s 2024 View Positive

Garmin increased its 2024 revenue guidance from $5.75 billion to $5.95 billion, while pro-forma earnings guidance has gone up from $5.40 per share to $6.

The Zacks Consensus Estimate for 2024 revenues is pegged at $5.97 billion, suggesting growth of 14.11% year over year. 

The consensus mark for 2024 earnings is pegged at $6.05, unchanged in the past 30 days, suggesting growth of 8.23% year over year.

GRMN’s Zacks Rank & Valuation

Garmin's focus on broadening its product portfolio is expected to drive clientele across diverse markets, including aviation, marine, automotive, and health and fitness.

However, weakness in the outdoor segment and aftermarket products is a concern for the Aviation segment. The challenging macroeconomic environment and inflationary pressures pose a headwind.

The GRMN stock is not so cheap, as the Value Score of D suggests a stretched valuation at this moment.

Garmin currently has a Zacks Rank #3 (Hold).

A Top-Ranked Stock to Buy

AudioEye (AEYE - Free Report) is a top-ranked stock in the broader sector, which is currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AEYE’s shares have skyrocketed 296.3% year to date. The long-term earnings growth rate for AudioEye is currently pegged at 25%.


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