On Tuesday, Tigress Financial Partners maintained a Strong Buy rating on Garmin Ltd . (NYSE:GRMN) stock and increased the 12-month price target to $210.00 per share.
The decision follows Garmin's announcement of record-setting first-quarter results, which were propelled by its leading fitness products and a consistent introduction of innovative new products.
The company's growth across multiple key categories has been complemented by operational improvements and margin expansion, contributing to an increase in shareholder value.
Garmin reported a 20% year-over-year increase in Q1 revenue, reaching a record $1.38 billion. This surge was led by robust performance in four key business lines and the introduction of strong new products.
Fitness revenue alone climbed 40% year-over-year to $342.89 million. The company's gross margin also improved to 58.1%, reflecting strong brand loyalty and demand for Garmin's advanced smart wearables.
The company's resilience is attributed to a diverse customer base with interests in aviation, marine, fitness, and outdoor activities. Garmin's new product introductions and operational excellence have been instrumental in attracting new customers, as evidenced by increased registrations and application enrollment. Additionally, the company's Auto OEM revenue is expected to grow due to new client acquisitions.
Garmin's market position is further bolstered by its innovation in avionics, marine navigation, and smart wearables, particularly in health monitoring and fitness.
The majority of platform registrations come from new customers, indicative of the expanding user base. Garmin is also enhancing its Garmin Connect fitness app and website with more features and functionality.
The company's portfolio, which includes LTE connectivity for selected smart wearables and satellite-based services, along with map and golf course updates, is anticipated to drive recurring subscription revenues.
Garmin's strong balance sheet and cash flow are enabling continued investment in product development. The firm's approach is expected to keep driving a market-leading return on capital, economic profit, and long-term shareholder value.
Lastly, Garmin's commitment to enhancing shareholder returns is evident through dividend increases and share repurchases. Tigress Financial Partners' revised 12-month price target of $210, in conjunction with dividends, forecasts a potential total return exceeding 25% from current levels.
InvestingPro Insights
Complementing the positive outlook from Tigress Financial Partners, Garmin Ltd. (NYSE:GRMN) showcases a robust financial health and promising investment metrics. According to InvestingPro data, Garmin holds a market capitalization of $32.61 billion, demonstrating its significant presence in the market. The company's P/E ratio stands at 23.76, reflecting investor confidence in Garmin's earnings potential. Moreover, with a PEG ratio of 0.57 for the last twelve months as of Q1 2024, the stock could be considered undervalued relative to its earnings growth. This aligns with one of the InvestingPro Tips highlighting that Garmin is trading at a low P/E ratio relative to near-term earnings growth.
InvestingPro Tips also reveal Garmin's impressive track record of increasing its dividend for 7 consecutive years, which is a testament to the company's commitment to shareholder returns. Additionally, Garmin's dividend yield is at 1.77%, with the company maintaining dividend payments for 22 consecutive years. This consistency in rewarding shareholders complements the strong total return of 67.25% over the past year, underscoring the stock's performance. For investors seeking further insights, there are over 17 additional InvestingPro Tips available, which can be accessed with an exclusive offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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