Garmin Ltd (GRMN, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance. With a current share price of $166.31, Garmin Ltd has experienced a modest daily increase of 0.2% and a significant three-month surge of 37.81%. A detailed analysis, supported by the GF Score, positions Garmin Ltd for potential substantial growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These aspects have been backtested from 2006 to 2021, showing a strong correlation with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. Garmin Ltd boasts a GF Score of 92 out of 100, indicating a high potential for outperformance, driven by its scores in financial strength (8/10), profitability (9/10), growth (10/10), GF Value (3/10), and momentum (9/10).
Understanding Garmin Ltd's Business
Garmin Ltd, with a market cap of $31.94 billion and annual sales of $5.46 billion, specializes in GPS-enabled hardware and software across five verticals: fitness, outdoors, auto, aviation, and marine. The company, which operates in 100 countries, licenses mapping data to support its specialized hardware, catering to niche activities like scuba diving and sailing. Garmin's diverse product range and global distribution network underscore its expansive operational footprint.
Financial Strength Breakdown
Garmin Ltd's financial resilience is evident in its robust balance sheet and strategic capital management. The company's Altman Z-Score of 16.27 suggests a strong buffer against financial distress. Additionally, its minimal Debt-to-Revenue ratio of 0.02 highlights effective debt management, further solidifying its financial health.
Profitability and Growth Metrics
Garmin Ltd's profitability is impressive, as indicated by its high Profitability Rank and a Piotroski F-Score. The company's consistent operational performance is further reflected in its 4.5-star Predictability Rank. In terms of growth, Garmin Ltd has demonstrated a strong commitment to expansion, with a 3-Year Revenue Growth Rate of 7.7%, outperforming 63.82% of its industry peers. The company's EBITDA has also seen significant growth, with a three-year growth rate of 2.4 and a five-year rate of 6.8.
Conclusion
Considering Garmin Ltd's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score effectively highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen available to GuruFocus Premium members.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
