Today's surge in Garmin's share price is noteworthy.
Garmin, with its ticker symbol GRMN, has been a fantastic investment for shareholders. After another excellent earnings report today, the stock has skyrocketed, almost doubling in the past 12 months. The impressive fourth-quarter results, combined with management's 2025 guidance, have boosted the stock once more during trading hours.
As of 11:30 a.m. ET, Garmin's shares were up by 12.6%, close to the day's highs.
Crushing Expectations
The fourth quarter was an extraordinary success on all fronts, surpassing even Garmin's conservative guidance. Not only did the company outperform internally predicted 2024 full-year revenue by a significant margin (reaching $6.3 billion, a 20% increase compared to 2023), but it also overshot the third-quarter's estimate of $6.12. The stunning 32% year-over-year pro forma EPS growth is a testament to Garmin's exceptional earnings performance.
Get Moving
One of the primary reasons for Garmin's stock boom is the increasing popularity of running as a hobby. Revenue from the fitness segment climbed an impressive 31% in the fourth quarter, with all categories of fitness products showing growth. The demand for wearables continues to stay strong. But it's not just the fitness segment that is growing - revenues also surged in outdoor, aviation, marine, and automotive sectors during the quarter.
Garmin boasts a substantial cash reserve of $3.7 billion and has a completely debt-free balance sheet. The company's robust financial health gave management the confidence to suggest a 20% dividend hike. Shareholders will likely approve this boost at the upcoming meeting.
The outlook for 2025 also contributed to the positive investor sentiment. Garmin expects a 8% revenue increase in 2025, alongside a 5.5% pro forma EPS growth. Given the company's history of modest guidance, keep an eye out for these factors to rise even further as the year unfolds.
Sources:[1] Garmin Earnings Release (4Q 2024) (PR Newswire)[2] Smartkarma Hardcopy Report (Garmin)[3] Seeking Alpha Contributor Article (Garmin)
Garmin's outstanding fourth-quarter earnings report, containing a 32% year-over-year pro forma EPS growth, has significantly surpassed their conservative 2024 guidance, boosting investor confidence in the company's future earnings potential. With the gleaming 2025 outlook of a 8% revenue increase and a 5.5% pro forma EPS growth, shareholders may see even more significant gains in the stock price, potentially containing substantial returns beyond 2025.
Many analysts have suggested that Garmin's impressive finance performance, especially in the fitness segment with a 31% increase in Q4 revenue, could encourage a shift in investment strategies towards the company. The ticker symbol GRMN has become a symbol of success for investors who have been keen on taking advantage of the company's rising share prices, which have nearly doubled in the past 12 months.
Investors have also noticed the debt-free balance sheet of Garmin and the company's substantial cash reserve of $3.7 billion, which plays a crucial role in boosting investor confidence and providing the necessary funds for further investments, maybe even future acquisitions.
Considering the company's strong financial health and the potential for future growth in revenue, Garmin might become an attractive option for investors looking for long-term investment opportunities in the finance sector, particularly in areas like investing in tech and wearable technologies.
