Garmin Ltd.

(New York Stock Exchange)
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Bullish +65

Guidance Raise And Momentum – Garmin Stock Has Both - Trefis

Earnings report Guidance raised AI-generated analysis

πŸ“ˆ Garmin raised its fiscal 2026 revenue forecast to $8.05 billion, an increase from the previous projection of $7.9 billion.

πŸ’° Pro forma earnings per share guidance was lifted to approximately $10 for the full year, up from $9.65.

πŸ“Š Operating margins expanded to 30.4% in the second quarter, driven by a better product mix and a $21 million tariff refund.

πŸƒ The fitness segment remains the largest revenue driver, generating $2.36 billion in fiscal 2025 with 32.8% year-over-year growth.

πŸ“‰ Revenue in the auto OEM segment is expected to decline as BMW volumes have peaked.

πŸ’Ύ Higher memory costs are anticipated for the second half of the fiscal year, already factored into gross margin forecasts.

πŸ”” The company launched the CIRQL Smart Ring, a screenless wearable designed to widen the market for wellness devices without requiring a subscription.

πŸ“ˆ Stock price surged 17.3% immediately following the guidance raise and trades 16.6% above its 200-day moving average.

πŸ“‰ The stock currently trades at a premium valuation of 29.9 times trailing earnings compared to the S&P 500's 23.0x multiple.

⏳ Management expects the back half of the year to show slower growth than the first half, requiring careful execution to meet the new targets.

Bullish Signals
  • Garmin raised its fiscal 2026 revenue forecast to $8.05 billion and pro forma EPS guidance to approximately $10 following strong second-quarter results.
  • Operating margins expanded significantly to 30.4% from 26.0% a year ago, driven by an improved product mix and a one-time tariff refund.
  • The fitness segment continues to be the primary growth engine, generating $2.36 billion in revenue for fiscal 2025 with a robust 32.8% increase.
  • The stock has demonstrated strong momentum, gaining 17.3% around the guidance release and trading well above its long-term moving averages.
  • The launch of the CIRQL Smart Ring is expected to expand the overall market for wellness devices without requiring a recurring subscription fee.
Risk Factors
  • The company anticipates higher memory costs in the second half, which will impact gross margins despite being factored into current forecasts.
  • Investors are valuing Garmin at 29.9 times trailing earnings, a significant premium compared to the S&P 500 average of 23.0x.
  • Management expects slower growth in the third and fourth quarters relative to the first half, creating pressure to meet the raised guidance targets.
Full Analysis
Garmin (GRMN) raised its fiscal 2026 revenue forecast to $8.05 billion and pro forma earnings per share to approximately $10 following the release of second-quarter results on July 29, 2026. The company's operating margin expanded significantly to 30.4% from 26.0% a year prior, driven by an improved product mix and a one-time $21 million tariff refund. Management highlighted that the fitness segment remains the primary growth engine, having generated $2.36 billion in revenue for fiscal 2025, a 32.8% increase from the previous year. The stock price has reacted positively to the guidance raise, gaining 17.3% over two trading sessions around the announcement and trading 16.6% above its 200-day moving average as of October 21, 2026. However, the company faces specific headwinds in the back half of the fiscal year, including expected revenue declines in its auto OEM segment due to peaked BMW volumes and anticipated increases in memory costs. Investors are currently valuing Garmin at 29.9 times trailing earnings, which is notably higher than the S&P 500 average. Looking ahead, management expects the newly announced CIRQL Smart Ring to expand the market for its wellness devices, though the company must deliver on its raised guidance with slower growth rates in the third and fourth quarters compared to the first half. The upcoming third-quarter revenue report is a critical test of whether Garmin can maintain its momentum and justify its premium valuation multiple amidst these specific operational constraints.