Garmin Ltd (GRMN) stock analysis

P/E above its 5-year median

Garmin's P/E of 28.2 is above its own 5-year median of 24.9.

P/E below the industry

Garmin's P/E of 28.2 is below the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 30.2.

EV/EBITDA above its 5-year median

Garmin's EV/EBITDA of 23.9 is above its 5-year median of 21.5.

P/B above the industry

Garmin's price-to-book of 5.93 is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 3.38.

Trading above fair value

The share price of $293.93 is above our fair value estimate of $258.23.

Margin of safety under 20%

The price is 13.8% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 14.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 19.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 28.4% over the last twelve months, against a 5-year average of 10.9% a year.

Growing faster than the industry

Revenue grew 13.6% over the last twelve months; the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median is 8.6%.

Guidance raised

Garmin raised its full year 2026 revenue outlook on Oct 28, 2026.

Gross margin improving

Gross margin was 61.1% over the last twelve months, against 58.7% a year earlier.

Return on equity over 15%

Return on equity was 22.4% over the last twelve months and averaged 18.5% over five years.

Return on capital over 10%

Return on invested capital was 28.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Garmin's return on equity of 22.4% is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.5%.

Earnings grew over 5 years

Net income grew 10.9% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 25.6% over the last twelve months, against a 5-year average of 22.4%.

Net margin above the industry

Garmin's net margin of 25.6% is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.4%.

No debt

Garmin has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 3.05 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 16.51; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Garmin paid dividends worth 1.3% of the share price over the last twelve months.

Yield below Treasuries

The 1.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Garmin yields 1.3%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 6 fiscal years.

Covered by earnings

Dividends take 37.2% of net income.

Covered by free cash flow

Dividends take 51.2% of free cash flow.