Garmin Ltd.
Garmin Ltd. Fundamental Analysis
Garmin Ltd. (GRMN) shows strong financial fundamentals with a PE ratio of 28.57, profit margin of 22.96%, and ROE of 19.72%. The company generates $7.2B in annual revenue with strong year-over-year growth of 20.44%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 95.2/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze GRMN's fundamental strength across five key dimensions:
Efficiency Score
ExcellentGRMN demonstrates superior asset utilization.
Valuation Score
WeakGRMN trades at a premium to fair value.
Growth Score
ModerateGRMN shows steady but slowing expansion.
Financial Health Score
ExcellentGRMN maintains a strong and stable balance sheet.
Profitability Score
ExcellentGRMN achieves industry-leading margins.
Key Financial Metrics
Is GRMN Expensive or Cheap?
P/E Ratio
GRMN trades at 28.57 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, GRMN's PEG of 4.86 indicates potential overvaluation.
Price to Book
The market values Garmin Ltd. at 5.30 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 23.44 times EBITDA. This signals the market has high growth expectations.
How Well Does GRMN Make Money?
Net Profit Margin
For every $100 in sales, Garmin Ltd. keeps $22.96 as profit after all expenses.
Operating Margin
Core operations generate 25.89 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.72 in profit for every $100 of shareholder equity.
ROA
Garmin Ltd. generates $15.13 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Garmin Ltd. produces operating cash flow of $1.63B, showing steady but balanced cash generation.
Free Cash Flow
Garmin Ltd. generates strong free cash flow of $1.36B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.09 in free cash annually.
FCF Yield
GRMN converts 2.86% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.57
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.86
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.56
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.63
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How GRMN Stacks Against Its Sector Peers
| Metric | GRMN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.57 | 34.79 | Better (Cheaper) |
| ROE | 19.72% | 1185.00% | Weak |
| Net Margin | 22.96% | -131296.00% (disorted) | Strong |
| Debt/Equity | 0.02 | 0.43 | Strong (Low Leverage) |
| Current Ratio | 3.63 | 4.90 | Strong Liquidity |
| ROA | 15.13% | -325472.00% (disorted) | Strong |
GRMN outperforms its industry in 5 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Garmin Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
65.66%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
46.48%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
102.71%
Industry Style: Growth, Innovation, High Beta
High Growth