Garmin (GRMN) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a changing earnings ...

Shares of GPS-focused technology behemoth Garmin (NYSE: GRMN) rose 11% this week as of 2 p.m. ET on Thursday following the company's excellent fourth-quarter earnings release on Wednesday. Sales and earnings per share rose 17% and 16% in Q4, rocketing past Wall Street's expectations. Similarly, management's guidance for 9% sales and EPS growth in 2026 also exceeded analysts' consensus, further driving the stock higher this week. Garmin: A well-rounded dividend-growth stock Perhaps the main reason the ma ...

Core Insights - Garmin Ltd. reported fourth-quarter 2025 pro forma earnings of $2.79 per share, exceeding the Zacks Consensus Estimate by 16.6%, with a year-over-year improvement of 16% [1] - Net sales reached $2.12 billion, surpassing the Zacks Consensus Estimate by 5.6% and increasing 16.6% from the previous year [1] Revenue Growth - The year-over-year growth in net sales was driven by strong performance in the Outdoor, Fitness, Aviation, and Marine segments, partially offset by a decline in the Auto OEM segment [2] Segment Performance - **Outdoor Segment**: Contributed 29.5% of net sales with $627.6 million in sales, maintaining year-over-year performance, and an operating income of $233.9 million at a 37% margin [3] - **Fitness Segment**: Accounted for 36.0% of sales, generating $765.8 million, reflecting a 42% year-over-year increase, with an operating income of $256.9 million and a 34% margin [3] - **Aviation Segment**: Achieved $274.2 million in sales, up 16% year over year, with an operating income of $84.7 million at a 31% margin [4] - **Marine Segment**: Reported $296.9 million in sales, an 18% increase year over year, with an operating income of $52.1 million and an 18% margin [4] - **Auto OEM Segment**: Sales were $160.4 million, down 3% year over year, resulting in an operating loss of $13.5 million and a gross margin of 17% [5] Operating Results - Garmin's gross margin for Q4 2025 was 59.2%, a decrease of 10 basis points year over year, while operating expenses rose 14% to $644 million [6] - Operating income increased to $614 million, up 19% year over year, with an operating margin of 28.9%, an increase of 60 basis points [6] Balance Sheet & Cash Flow - As of December 27, 2025, Garmin held $2.67 billion in cash and marketable securities, up from $2.54 billion in the previous quarter [7] - Operating cash flow for Q4 2025 was $554 million, with free cash flow at $430 million [7] - The company paid a quarterly dividend of $173 million and repurchased $51 million in shares during the quarter [7] Future Guidance - Garmin expects full-year 2026 revenues of $7.9 billion, indicating continued growth momentum, with the Zacks Consensus Estimate at $7.54 billion, reflecting a year-over-year growth of 13.3% [8] - The company projects a gross margin of 58.5%, an operating margin of 25.5%, and a pro forma effective tax rate of 16.0% for 2026 [10] - Pro forma EPS is projected at $9.35, with the Zacks Consensus Estimate at $8.77, indicating a year-over-year growth of 7% [10]

Vertical integration serves as a primary defense against component cost volatility, allowing the company to manage the total Bill of Materials (BoM) more efficiently than non-integrated competitors.High user engagement, evidenced by an 8% increase in average activity levels, is driving strong pull-through rates for new product registrations and retail demand.The Auto OEM segment is undergoing a strategic pivot, shifting R&D resources toward other segments as legacy programs reach end-of-life and the company ...

Geographically, the Americas grew 21% and exceeded $1 billion in quarterly revenue for the first time, while EMEA grew 14% and APAC grew 8%.Chief Financial Officer Doug Boessen added that fourth-quarter GAAP EPS was $2.73 and noted operating expenses increased about $80 million, or 14%, driven by higher research and development (personnel-related) and increased SG&A from advertising and personnel-related expenses. By segment in the quarter, Garmin posted double-digit growth in three of five segments, led by ...

Core Viewpoint - Garmin Ltd. reported Q4 results that exceeded analysts' expectations, showcasing a double beat and providing aggressive guidance, which positively impacted its share price [1]. Financial Performance - The company achieved a double beat in its Q4 results, indicating that both revenue and earnings per share surpassed analyst forecasts [1]. Future Guidance - Garmin provided aggressive guidance for future performance, suggesting strong confidence in its growth trajectory [1].

U.S. equity markets are showing robust momentum during midday trading this Wednesday, February 18, 2026, as investors shake off recent "AI fatigue" in favor of a renewed focus on economic resilience. A wave of better-than-expected economic reports released this morning has bolstered confidence in a "soft landing" scenario, even as the market braces for the release of the Federal Open Market Committee (FOMC) minutes later this afternoon.Major Indexes Show Broad GainsAs of midday, the major market indexes are ...

Financial Data and Key Metrics Changes - Consolidated revenue increased 17% to over $2.1 billion in Q4 2025, marking a new record for the fourth quarter and the first quarter to exceed $2 billion [5][20] - Full year consolidated revenue rose 15% to $7.25 billion, a new annual record, up nearly $1 billion from 2024 [6][22] - Gross margin for Q4 was 59.2%, comparable to the prior year, while operating margin expanded by 60 basis points to 28.9% [5][20] - Record full-year operating income reached nearly $1.9 billion, up 18% year-over-year, with an operating margin of 25.9% [7][22] Business Segment Data and Key Metrics Changes - Fitness segment revenue increased 33% to $2.36 billion, driven by wearables, with operating income up 50% year-over-year to $726 million [10][11] - Outdoor segment revenue grew 5% to $2.05 billion, primarily from adventure watches, with operating income of $690 million [12][14] - Aviation segment revenue rose 13% to $987 million, with operating income increasing 22% to $257 million [15] - Marine segment revenue increased 10% to $1.18 billion, with operating income of $251 million [16] - Auto OEM segment revenue grew 9% to $665 million, but operating loss was $49 million for the year [18][19] Market Data and Key Metrics Changes - In Q4, the Americas region achieved strong double-digit growth of 21%, with quarterly revenue exceeding $1 billion for the first time [23] - For the full year, EMEA region grew by 18%, Americas by 40%, and APAC by 12% [23] Company Strategy and Development Direction - The company focuses on market diversification and creating superior products essential to customers' lives, which has been a successful strategy since its inception [6] - The company anticipates 2026 to be another year of strong growth, expecting revenue to increase approximately 9% to $7.9 billion [8][27] - A $500 million share repurchase program was approved, effective through December 2028, alongside a proposed annual dividend increase of 17% [9][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply chain challenges and highlighted strong relationships with suppliers [8][9] - The company is optimistic about continued growth in the fitness segment, driven by demand for current products and new introductions [11][33] - Management noted that the overall market for wearables is on a steady growth path, with Garmin gaining market share [78] Other Important Information - The company plans to shift R&D resources from the auto OEM segment to accelerate product development in other segments [40] - The Truemed collaboration allows customers to use HSA and FSA funds for Garmin products, becoming a significant sales channel [59] Q&A Session Summary Question: Impact of memory costs on 2026 guidance - Management acknowledged pressure on memory costs but did not quantify the impact, emphasizing overall cost efficiency across the BOM [30][31] Question: Factors contributing to wearables growth - Growth was primarily volume-driven, with minor impacts from ASP; management expects continued momentum in 2026 [32][33] Question: Future of auto OEM business - Management noted that projections were based on automotive OEM partners' assumptions, which have since changed; they are focusing on achieving scale and innovation [39] Question: Growth opportunities in aviation - Management confirmed that projects like the Black Hawk helicopter modernization represent growth opportunities, leveraging commercial products for military applications [48][90] Question: Update on Connect Plus uptake - Management reported high conversion rates for the nutrition feature added to Connect Plus, indicating strong customer interest [49] Question: Global wearables market trends - Management believes the overall wearables market is experiencing steady growth, with Garmin gaining market share [78] Question: Marine industry outlook - Management sees a healthy marine market with active boat shows and demand for larger boats, contributing to growth [81]

Financial Data and Key Metrics Changes - Consolidated revenue increased 17% to over $2.1 billion in Q4 2025, marking a new record for the fourth quarter and the first quarter to exceed $2 billion [5][20] - Full year consolidated revenue rose 15% to $7.25 billion, a new annual record, with gross margin at 58.7% and operating margin expanding 60 basis points to 25.9% [6][7] - Record operating income of nearly $1.9 billion for the full year, up 18% year-over-year, with pro forma EPS of $8.56, a 16% increase [21][26] Business Segment Data and Key Metrics Changes - Fitness segment revenue surged 33% to $2.36 billion, driven by wearables, with operating income increasing 50% year-over-year to $726 million [10] - Outdoor segment revenue grew 5% to $2.05 billion, primarily from adventure watches, with operating income of $690 million [12] - Aviation segment revenue increased 13% to $987 million, with operating income rising 22% to $257 million [14] - Marine segment revenue rose 10% to $1.18 billion, with operating income of $251 million [16] - Auto OEM segment revenue increased 9% to $665 million, but operating loss was $49 million [18] Market Data and Key Metrics Changes - Americas region achieved strong double-digit growth of 21%, with quarterly revenue exceeding $1 billion for the first time [23] - EMEA region grew by 14% and APAC region by 8% in Q4 2025 [23] - For the full year, EMEA grew 18%, Americas 40%, and APAC 12% [23] Company Strategy and Development Direction - The company focuses on market diversification and creating essential products, which has been a successful strategy since its inception [6] - Future guidance anticipates revenue growth of approximately 9% to $7.9 billion in 2026, with operating income expected to exceed $2 billion for the first time [8][27] - The company plans to continue leveraging its vertically integrated business model to optimize cost structures amid supply chain challenges [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply chain challenges and highlighted strong relationships with suppliers [8][9] - The company expects continued strong performance in the fitness segment, driven by demand for current products and new introductions [11] - Management noted that the overall market for wearables is on a steady growth path, with Garmin gaining market share [78] Other Important Information - The company proposed an annual dividend of $4.20 per share, reflecting a 17% increase, and announced a $500 million share repurchase program [9][26] - The company is exploring new product categories and enhancing existing services, such as the Connect Plus program, which has seen high engagement [49][60] Q&A Session Summary Question: Impact of memory costs on 2026 guidance - Management indicated that while memory costs are under pressure, they do not quantify individual components of the cost structure [29][30] Question: Factors contributing to wearables growth - Management noted that growth was primarily volume-driven, with minor impacts from average selling price [32][33] Question: Future of auto OEM business - Management acknowledged that while initial projections were optimistic, they are now focusing on achieving scale and investing for future growth [38][39] Question: Growth opportunities in aviation - Management confirmed that projects like the Black Hawk helicopter represent growth opportunities, utilizing commercial components for military applications [47][48] Question: Update on Connect Plus uptake - Management reported high conversion rates for the nutrition feature added to Connect Plus, indicating strong customer interest [49] Question: Global wearables market trends - Management believes the overall wearables market is experiencing steady growth, with Garmin successfully gaining market share [78]

Financial Data and Key Metrics Changes - Consolidated revenue increased 17% to over $2.1 billion in Q4 2025, marking a new record for the fourth quarter and the first quarter to exceed $2 billion [4][20] - Full year consolidated revenue rose 15% to $7.25 billion, a new annual record, with gross margin at 58.7% and operating margin expanding by 60 basis points to 25.9% [5][21] - Record operating income for Q4 was $614 million, up 19% year-over-year, and for the full year, it was nearly $1.9 billion, an 18% increase [4][6] Business Segment Data and Key Metrics Changes - Fitness segment revenue increased 33% to $2.36 billion, with operating income rising 50% year-over-year to $726 million [10] - Outdoor segment revenue grew 5% to $2.05 billion, driven by adventure watches, with operating income of $690 million [12] - Aviation segment revenue increased 13% to $987 million, with operating income rising 22% to $257 million [14] - Marine segment revenue rose 10% to $1.18 billion, with operating income of $251 million [16] - Auto OEM segment revenue increased 9% to $665 million, but operating loss was $49 million [18] Market Data and Key Metrics Changes - In Q4, the Americas region achieved strong double-digit growth of 21%, while EMEA and APAC regions grew by 14% and 8%, respectively [22] - For the full year, EMEA grew by 18%, Americas by 40%, and APAC by 12% [22] Company Strategy and Development Direction - The company focuses on market diversification and creating superior products essential to customers' lives, which has been a successful strategy since its inception [5] - The company anticipates 2026 to be another year of strong growth, expecting revenue to increase approximately 9% to $7.9 billion and operating income to exceed $2 billion for the first time [7][27] - The company will no longer emphasize individual segment growth targets, focusing instead on consolidated guidance measures [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply chain challenges and highlighted strong relationships with suppliers [8][9] - The company is prepared for potential impacts from memory constraints and is actively seeking efficiencies throughout its supply chain [8] - Management noted that the overall market for wearables is on a steady growth path, with Garmin gaining market share [79] Other Important Information - The company proposed an annual dividend of $4.20 per share, reflecting a 17% increase, and announced a $500 million share repurchase program [9][25] - The company is investing in a new manufacturing facility in Thailand, expected to be operational in early 2027 [25] Q&A Session Summary Question: Impact of memory costs on 2026 guidance - Management acknowledged pressure on memory costs but did not quantify the impact, emphasizing overall cost efficiency across the bill of materials [29][31] Question: Factors contributing to wearables growth - Management indicated that volume was the primary driver of growth in wearables, with minor impacts from average selling price [33][34] Question: Future of auto OEM business - Management discussed the need to achieve scale and invest in innovation, indicating a shift in R&D resources to accelerate product development [38][41] Question: Military exposure in aviation segment - Management confirmed that projects like the Black Hawk helicopter represent growth opportunities, utilizing commercial components for modernization [49][50] Question: Update on Connect Plus uptake - Management reported high conversion rates for the nutrition feature added to Connect Plus, indicating strong customer interest [51] Question: Timing of new product launches in outdoor segment - Management stated that many product launches are planned for the back half of the year, expecting stronger revenue in that period [44] Question: Ratable business growth priority - Management confirmed that while subscription-based business margins are higher, the focus remains on overall growth across all segments [95][96]