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Here's Why You Should Add Garmin (GRMN) to Your Portfolio

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Garmin Ltd. GRMN is currently one of the top-performing stocks in the technology sector. Markedly, an increase in share price and strong fundamentals signal its bullish run. Therefore, if you haven't taken advantage of the share price appreciation yet, it's time you add the stock to your portfolio right now.

The company has performed pretty well this year and has the potential to carry on the momentum in the near term as well.

Why an Attractive Pick?

Share Price Appreciation: A glimpse of the company's price trend shows that the stock has had an impressive run on the bourses year to date. Garmin has returned 4.4% compared with the industry 's rally of 14% in the said period.

Solid Rank: Garmin currently sports a Zacks Rank #1 (Strong Buy). Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today's Zacks #1 Rank stocks here .

Northward Estimate Revisions: Five estimates for the current year have moved north over the past 60 days against no southward revisions, reflecting analysts' confidence in the company. Moreover, the Zacks Consensus Estimate for the current year has increased 5.2% over the same period. Also, the Zacks Consensus Estimate for 2019 has inched up 3.6% to $3.50.

Positive Earnings Surprise History: Garmin has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with average positive earnings surprise of 18.5%.

Strong Growth Prospects: The Zacks Consensus Estimate for fiscal 2018 earnings of $3.47 reflects year-over-year growth of 18.03%. Moreover, earnings are expected to grow 1.04% in 2019. The stock has a long-term expected earnings per share growth rate of 7.3%.

Growth Drivers

Garmin's top-line growth continues to be driven by solid momentum across its fitness, marine, outdoor and aviation segments. The company has been riding on product line expansion. Garmin's strategy involves a constantly evolving product line supported by a platform approach that increases engagement with its products and focuses on building a community of users.

In addition, accelerated adoption of Garmin's wearable products has been a huge positive for the company.

Furthermore, according to data from Allied Market Research, the global market for fitness tracker is projected to reach $62.13 billion by 2023 at a CAGR of 19.6% between 2017 and 2023. We believe that Garmin is well poised to capitalize on growth opportunities of its domain.

In October, the company took the wraps off the new GPS watch, which featured heart rate sensors, sports apps, smart connectivity and wellness data, allowing users to explore outdoor activities in a more challenging environment. The launch further helped it expand its share in the wearables market, as well as fend off competition from players like Fitbit FIT , Apple AAPL and Alphabet GOOGL , among others.

During the earnings call, Garmin raised its earnings guidance for full-year 2018, indicating strong growth in the near future. Though management maintained its revenue guidance at $3.3 billion, it increased pro-forma earnings to $3.45 per share versus earlier projection of $3.30. Currently, the Zacks Consensus Estimate for revenues and earnings for 2018 is pegged at $3.31 billion and $3.47 per share, respectively.

We believe that increasing investments in wearable gadgets such as outdoor watches and marine cameras will help Garmin to counter the decline in sales of traditional automobile navigation devices.

Garmin Ltd. Price and Consensus

Garmin Ltd. Price and Consensus | Garmin Ltd. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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