Back to top

Analyst Blog

Navigation and communications equipment provider Garmin Ltd. (GRMN - Free Report) announced yesterday that it has received the Federal Aviation Administration’s (FAA) nod to install The GTX 345/335 transponders in more than 60 helicopter models.

The FAA has given Supplemental Type Certification (STC) for the installation of the GTX 335 Automatic Dependent Surveillance Broadcast (ADB-S) Out and GTX 345 ADS-B In/Out transponders in an Approved Model List (AML) of Part 27 helicopters.

The company has stated that no panel modification is required while replacing GTX 345/335 with other popular transponders in the market.

Optimized Helicopter Solutions

The GTX 345/335 transponders feature 1.65-inch (4.2 centimeters) tall panel-mount transponder with bright, sunlight readable digital display, pressure altitude readout and numeric squawk code entry buttons and a built-in timer.

For Wide Area Augmentation System (WAAS) such as GTN 650/750-enabled helicopters, remote mount options are available for display and control. For helicopters without a WAAS-enabled GPS, the option for an integrated GPS/SBAS position source is available. Both models are equipped with sophisticated alert and nuisance alert suppression capacities.

GTX 345 has some additional features such as ADS-B traffic and subscription-free weather display mechanisms in the cockpit. It can stream traffic and weather wirelessly to select Garmin portables and other popular apps.

GARMIN LTD Price

To Conclude

Garmin’s aviation business remains lumpy because of the timing of certifications for various aircraft. However, Garmin solutions remain popular at both Original Equipment Manufacturer (OEM) and after-market customers.

Last quarter, Aviation segment revenues were down 0.8% sequentially but up 14% year over year. The year-over-year increase was mainly driven by higher sales of OEM products and ADS-B systems. (Read more: Garmin (GRMN - Free Report) Q3 Earnings & Revenues Beat Expectations)

Gross margin from this segment stayed over 70%. In the last quarter, the G5000-equipped Beechjet 400A received certification. The company’s initiatives to expand its portfolio and enhance existing product lines are therefore positive. Management stated that the company targets more certifications especially the G5000 integrated flight deck upgrade for the Citation Excel and the XLS.

Garmin has recently launched a new product called Flight Stream 510, a multi-mode wireless radio system that can connect to a smartphone or tablet to simplify the process of updating flight database.

With its GTX 335 and 345 families of ADS-B transponders, Garmin is well positioned to take advantage of the FAA mandated transition to more efficient transponders (air traffic management systems). Transition to the ADS-B transponders must be completed by 2019.

Zacks Rank and Stocks to Consider

Currently, Garmin is a Zacks Rank #2 (Buy) stock. Stocks worth considering in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Kimball Electronics, Inc. (KE - Free Report) and Control4 Corporation (CTRL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, the consensus estimate for NVIDIA has gone up by 30.6% in the past 30 days. Estimates for Kimball Electronics and Control4 have gone up by 8.1% and 10%, respectivelyover the same time frame. 

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now.Click here >>