Garmin Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Garmin Ltd. (NYSE:GRMN) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 4.4% to hit US$2.0b. Garmin also reported a statutory profit of US$2.80, which was an impressive 25% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Garmin after the latest results.
After the latest results, the seven analysts covering Garmin are now predicting revenues of US$8.09b in 2026. If met, this would reflect a satisfactory 5.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.8% to US$10.01. In the lead-up to this report, the analysts had been modelling revenues of US$7.99b and earnings per share (EPS) of US$9.37 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Garmin
The consensus price target rose 8.2% to US$284, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Garmin at US$330 per share, while the most bearish prices it at US$220. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Garmin'shistorical trends, as the 11% annualised revenue growth to the end of 2026 is roughly in line with the 10% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.8% per year. So it's pretty clear that Garmin is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Garmin following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Garmin. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Garmin analysts - going out to 2028, and you can see them free on our platform here.
You can also see our analysis of Garmin's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.