Key Points
Garmin expects sales and earnings to keep growing in 2026.
Management is seeking a 17% dividend boost.
Garmin has over $4 billion in cash and equivalents.
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Investors are sending Garmin (NYSE: GRMN) shares soaring today after the company reported a record year. Not only did the maker of GPS-enabled wearables and devices finish the year with record revenue across all five segments, but management also predicts more to come.
The solid report sent shares up over 18% before the stock settled 16.4% higher as of 9:51 a.m. ET.
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Image source: Garmin.
Cash and dividends
Fourth-quarter revenue jumped 17% year over year, helping the company grow sales by 15% for the whole year. That compares with the company's initial guidance of 8% revenue growth in 2025. Garmin told investors to expect 9% revenue growth this year. Considering the overachievement in 2025, however, that estimate again might be too conservative.
The fitness category led fourth-quarter revenue growth at 42%. All segments are doing well for the company, which helps explain investor enthusiasm today. There could be more room for the stock to move higher, too. Even with today's jump, Garmin's price-to-earnings (P/E) ratio based on 2026 expectations is under 27. If one assumes management is again being conservative, that metric will continue to drop throughout 2026.
Investors can be patient and collect more income along the way. The company is recommending a 17% dividend increase for this year. Garmin also established a new, $500 million share repurchase authorization. That replaces the existing $300 million plan that had just $56 million remaining. The company is also sitting on a fortress-like balance sheet, with over $4 billion in cash and equivalents and no debt.
It's not hard to see why the stock is soaring today.
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Howard Smith has positions in Garmin. The Motley Fool has positions in and recommends Garmin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
