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Can Garmin's Expanding Aviation Portfolio Push the Stock Upward?
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Garmin (GRMN - Free Report) expands its Aviation segment with the introduction of G3000 PRIME, a modern integrated flight deck offering an all-touchscreen display and highly flexible open system architecture, facilitating a seamless and unmatched cockpit experience.
With a highly developed user interface design and advanced connectivity, G3000 PRIME leverages the latest technologies to enhance safety, potential and efficiency while minimizing pilot workload in every phase of flight.
G3000 PRIME comes with a broad 14-inch touchscreen primary display unit with edge-to-edge, sunlight-readable, fingerprint-resistant glass, redefining expectations in cockpit aesthetics and functionality.
Aviation has performed in line with GRMN’s expectations, to date. It now anticipates 2024 revenues for Aviation to be relatively flat, which is expected to be fully offset by higher revenues in Fitness, Marine and Outdoor segments.
Garmin raised its 2024 revenue guidance from $5.75 billion to $5.95 billion. It reported revenues of $5.23 billion in 2023.
Pro-forma earnings guidance increased from $5.40 per share to $6 per share. It reported earnings of $5.59 per share in 2023.
GRMN’s Fitness revenues are projected to increase 20% for the year. The revenue growth rate for the Marine segment has been raised to 15% for the year. Garmin has maintained its 7% growth estimate for the Outdoor segment and a promising 50% growth rate for Auto OEM in 2024.
The Zacks Consensus Estimate for 2024 revenues is pegged at $5.99 billion, indicating growth of 14.6% year over year.
The consensus mark for 2024 earnings stands at $6.08, up 0.49% over the past 60 days, suggesting growth of 8.77% year over year.
GRMN’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21.76%.
Shares of Trimble gained 15.5%, while Greenland Technologies and Exro Technologies Inc. lost 17.5% and 86.8%, respectively. The industry declined 14.9% YTD.
Expanding Fitness, Marine & Outdoor Aids GRMN’s Top Line
GRMN’s Venu, Lily and Vivoactive smartwatch series, featuring new health and wellness capabilities with enhanced sleep tracking, stress and respiration analysis marks a noteworthy achievement for its Fitness segment.
Garmin’s recent addition of a new classic smartwatch, the Lily 2 Active, to its Fitness portfolio is likely to benefit the stock. The Lily 2 Active is a blend of a timeless design with modern technology, including popular health and wellness features.
GRMN’s latest introduction of the Fusion Apollo Marine Speakers and Subwoofers is expected to boost its Marine Segment. Featuring dual-hue LED lighting rings and easily interchangeable grilles, the speakers and subwoofers provide distinct sound quality with a premium onboard experience for the boaters.
The launch of the GC 245 and GC 255 cameras, specifically designed to enhance proximity awareness and confidence while docking, is a plus for the Marine Segment.
The release of the latest Approach Z30 smart laser rangefinder, which sends distance measurements to a suitable Garmin smartwatch or the Garmin Golf smartphone app, might gain traction in the Outdoor segment.
The release of the inReach Messenger Plus, its first satellite communicator with photo and voice messaging, texting and location-sharing options is a major positive for its Outdoor Segment. It provides seamless connectivity as a standalone device or when paired with the Garmin messenger app, with anyone when they are beyond cell coverage.
Zacks Rank & Valuation
GRMN stocks are overvalued at this moment as suggested by a Value Score of D.
Garmin stock is trading at a premium with a forward 12-month Price/Sales of 5.06X compared with the industry’s 1.55X.
Image: Bigstock
Can Garmin's Expanding Aviation Portfolio Push the Stock Upward?
Garmin (GRMN - Free Report) expands its Aviation segment with the introduction of G3000 PRIME, a modern integrated flight deck offering an all-touchscreen display and highly flexible open system architecture, facilitating a seamless and unmatched cockpit experience.
With a highly developed user interface design and advanced connectivity, G3000 PRIME leverages the latest technologies to enhance safety, potential and efficiency while minimizing pilot workload in every phase of flight.
G3000 PRIME comes with a broad 14-inch touchscreen primary display unit with edge-to-edge, sunlight-readable, fingerprint-resistant glass, redefining expectations in cockpit aesthetics and functionality.
Garmin Ltd. Price and Consensus
Garmin Ltd. price-consensus-chart | Garmin Ltd. Quote
GRMN’s FY24 Guidance Looks Promising
Aviation has performed in line with GRMN’s expectations, to date. It now anticipates 2024 revenues for Aviation to be relatively flat, which is expected to be fully offset by higher revenues in Fitness, Marine and Outdoor segments.
Garmin raised its 2024 revenue guidance from $5.75 billion to $5.95 billion. It reported revenues of $5.23 billion in 2023.
Pro-forma earnings guidance increased from $5.40 per share to $6 per share. It reported earnings of $5.59 per share in 2023.
GRMN’s Fitness revenues are projected to increase 20% for the year. The revenue growth rate for the Marine segment has been raised to 15% for the year. Garmin has maintained its 7% growth estimate for the Outdoor segment and a promising 50% growth rate for Auto OEM in 2024.
The Zacks Consensus Estimate for 2024 revenues is pegged at $5.99 billion, indicating growth of 14.6% year over year.
The consensus mark for 2024 earnings stands at $6.08, up 0.49% over the past 60 days, suggesting growth of 8.77% year over year.
GRMN’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21.76%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Innovative Portfolio Aids GRMN’s Prospects
GRMN’s innovations across segments have been driving its top-line growth, positively impacting its share price movements and prospects.
On a year-to-date (YTD) basis, Garmin’s shares have gained 29.6%, outperforming the broader Zacks Computer and Technology sector’s return of 25.1%.
Over the same time frame, GRMN has outperformed its Electronics - Miscellaneous industry and peers, including Trimble (TRMB - Free Report) , Greenland Technologies (GTEC - Free Report) and Exro Technologies Inc. (EXROF - Free Report) .
Shares of Trimble gained 15.5%, while Greenland Technologies and Exro Technologies Inc. lost 17.5% and 86.8%, respectively. The industry declined 14.9% YTD.
Expanding Fitness, Marine & Outdoor Aids GRMN’s Top Line
GRMN’s Venu, Lily and Vivoactive smartwatch series, featuring new health and wellness capabilities with enhanced sleep tracking, stress and respiration analysis marks a noteworthy achievement for its Fitness segment.
Garmin’s recent addition of a new classic smartwatch, the Lily 2 Active, to its Fitness portfolio is likely to benefit the stock. The Lily 2 Active is a blend of a timeless design with modern technology, including popular health and wellness features.
GRMN’s latest introduction of the Fusion Apollo Marine Speakers and Subwoofers is expected to boost its Marine Segment. Featuring dual-hue LED lighting rings and easily interchangeable grilles, the speakers and subwoofers provide distinct sound quality with a premium onboard experience for the boaters.
The launch of the GC 245 and GC 255 cameras, specifically designed to enhance proximity awareness and confidence while docking, is a plus for the Marine Segment.
The release of the latest Approach Z30 smart laser rangefinder, which sends distance measurements to a suitable Garmin smartwatch or the Garmin Golf smartphone app, might gain traction in the Outdoor segment.
The release of the inReach Messenger Plus, its first satellite communicator with photo and voice messaging, texting and location-sharing options is a major positive for its Outdoor Segment. It provides seamless connectivity as a standalone device or when paired with the Garmin messenger app, with anyone when they are beyond cell coverage.
Zacks Rank & Valuation
GRMN stocks are overvalued at this moment as suggested by a Value Score of D.
Garmin stock is trading at a premium with a forward 12-month Price/Sales of 5.06X compared with the industry’s 1.55X.
GRMN carries a Zacks Rank #2 (Buy) at present, implying that investors should accumulate the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.