Garmin Earnings: Impressive Revenue Beat and Margin Improvement Provides Optimism

We are raising our fair value estimate for narrow-moat Garmin to $132 per share from $124 after the firm reported fourth-quarter results above FactSet consensus and our expectations. We are impressed with Garmin’s ability to deliver on revenue growth and profitability thus far, despite end market headwinds. As shipping bottlenecks ease and demand momentum improves, we expect a healthy boost in revenue, profitability, and cash flow for the firm in 2024. We continue to believe the firm’s long-term value is solid, as Garmin’s industry-leading products lie at the core of its customers’ functions. Management laid out its 2024 targets, which came in higher than our top-line expectations but slightly lower than our bottom-line estimates due to changing revenue mix. With shares up around 11% upon market open, we view the stock as fairly valued.