Garmin: Summary of 2024 results and outlook for 2025

2024 was a very successfulyear for Garmin $GRMN, with revenue growth of 19% and improved operating profitability to 24% (from 20% in 2023). The company particularly benefited from the strengthening of its fitness, outdoor and marine segments, underlining the successful transformation of its portfolio.

Key success factors

1. Portfolio diversification:

- $GRMN has shifted its center of gravity from traditional GPS devices towards high-growth technology segments such as smartwatches, fitness trackers and outdoor devices.

- The key role is played by Outdoor segmentwhich achieves profit margins nearly double the company average, thanks to products such as multisport watches Fenix 8.

2. Innovation:

- The successful launch of new products in 2024 attracted new customers and solidified $GRMN's position as a leader in fitness and outdoor technology.

3. Financial stability:

- Increased operating profitability reflects effective cost management and focus on higher margin segments.

Expectations for 2025

Analysts expect:

- Revenue growth of 10%.: After a great year in 2024, more stable but still solid revenue growth is expected, supported by continued expansion into premium segments.

- Earningsof $7 per share: If $GRMN meets expectations, it could offer an interesting return given its current valuation.

Risks

1. Competition:

- $GRMN faces stiff competition from giants such as Apple (AAPL) or Fitbit, which have a stronger position in the smartwatch and fitness device segments.

2. Dependence on premium products:

- An economic slowdown could affect demand for more expensive devices, which would have a negative impact on sales.

3. High stock valuations:

- Shares of $GRMN trade at 30 times expected earnings, similar to Apple, despite smaller scale and weaker margins.

Investment recommendation

- For long-term investors: $GRMN represents a stable growth opportunity due to its diversified portfolio and innovative capabilities. If you believe in the continued growth of the fitness and outdoor segments, Garmin stock could be an interesting choice.

- For new investors: Wait for a correction or a better entry price as the stock's current valuation reflects optimistic expectations for 2025.

$GRMN has successfully undergone a transformation and continues to benefit from growing demand for fitness and outdoor gear. The year 2025 will be key in confirming its long-term growth potential.