Garmin Ltd (GRMN, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $134.09, Garmin Ltd has witnessed a daily gain of 0.11%, marked against a three-month change of 11.92%. A thorough analysis, underlined by the GF Score, suggests that Garmin Ltd is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Garmin Ltd's GF Score of 92 out of 100 is indicative of its potential for market outperformance. The company's high ranks in financial strength, profitability, and growth are particularly noteworthy, while its GF Value rank suggests that the stock may be currently undervalued. The momentum rank also reflects positive investor sentiment and price trends.
Understanding Garmin Ltd's Business
Garmin Ltd, with a market capitalization of $25.72 billion and annual sales of $5.23 billion, is a leading provider of GPS-enabled hardware and software across five verticals: fitness, outdoors, auto, aviation, and marine. The company's operating margin stands at 20.89%, showcasing its efficiency in converting sales into profits. Garmin's global presence spans 100 countries, with a distribution network that includes both direct sales and partnerships with original equipment manufacturers.
Financial Strength Breakdown
Garmin Ltd's financial strength is evident in its Financial Strength rank of 8/10. The company's Altman Z-Score of 12.05 is a testament to its ability to avoid financial distress, and its Debt-to-Revenue ratio of 0.02 indicates a strategic approach to debt management that enhances its financial health.
Profitability Rank Breakdown
The company's Profitability Rank of 9/10 underscores its superior ability to generate earnings compared to its competitors. Garmin Ltd's financial health is further reinforced by a strong Piotroski F-Score, and its Predictability Rank of 3.0 stars reflects consistent operational performance.
Growth Rank Breakdown
Garmin Ltd's Growth Rank of 10/10 highlights its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 7.7% outperforms 59.26% of its industry peers. The positive trend in EBITDA growth over the past three and five years further demonstrates Garmin's growth capabilities.
Conclusion: Garmin Ltd's Position for Outperformance
Considering Garmin Ltd's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking companies with strong financial foundations and growth prospects would do well to consider Garmin Ltd as a compelling investment opportunity.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
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.
