Garmin (GRMN) stock soars 23% in a day: Here’s why

Though far from the most highly anticipated report of the ongoing earnings season, Garmin’s (NYSE: GRMN) report, posted on October 30, might have turned out to be the most exciting.

The American, Swiss-domiciled technology company specializing in devices for outdoor recreation, navigation, and fitness posted an exceptionally strong result, which – paired with revised guidance – proved sufficient to trigger a massive stock market breakout for GRMN shares.

Specifically, Garmin shares surged 26.03% within a day and rocketed from $166.27 ahead of earnings to their latest closing price of $204.92. The slight extended session retracement had little impact, as it only reduced the stock price to its press time value of $203.96.

Garmin’s blockbuster Q3 earnings report

Looking at the report, there is scarcely a non-impressive figure within.

Year over year (YoY), Garmin’s sales rocketed 24%, and earnings soared 41%. The strong numbers are also substantially above the forecasts. 

For example, it was generally expected that the company would generate $1.44 billion in sales and report earnings-per-share (EPS) of $1.45.

Instead, Garmin revealed its sales amounted to $1.59 billion, and the EPS stood as high as $1.99.

These third-quarter (Q3) results owe much to the success of the fitness division, which saw a 31% sales increase to a total value of $464 million.

The current success emboldened Garmin to upgrade its guidance. Now, the company expects its full-year sales to reach $6.12 billion and earnings $6.85 per share. The final trimester of 2024 is forecasted to account for $1.65 in earnings and $1.63 billion in sales.

The Q3 report and the ensuing breakout ensured that GRMN shares blasted past most resistance levels. The new key levels to watch out for when eying a continued rally are $207 and higher.

Still, despite the performance invalidating the prevailing Wall Street expert thesis for now, it is important to remain cautious.

Indeed, the analyst ratings available at press time on October 31 are generally bearish, with half of all experts recommending selling. In fact, Tigress Capital was the only prominent firm to recommend buying – and setting a high $215 12-month target – ahead of the blockbuster earnings.

Featured image:

Dontree_M. Garmin Epix Pro Gen 2, Sapphire Edition 47 mm. Digital image. Bangkok, Thailand – January 14, 2024. Shutterstock, February 13, 2024. Date retrieved: October 31, 2024.