Garmin (NYSE: GRMN) shares surged to record highs in July after the company reported a stellar second quarter, fueled by strong demand across its wearable tech, aviation, and marine GPS segments.
A Performance-Driven Rally
Garmin stock climbed 23.7% in July, bringing its total year-to-date gains to 53%, according to data from S&P Global Market Intelligence. This momentum follows an impressive earnings report that prompted management to raise its full-year guidance. The company now expects 11% year-over-year revenue growth and a nearly 17% increase in earnings per share (EPS).
Diversified Growth Across Segments
The company’s success is widespread, with all five business segments contributing to its robust financial health. While the outdoor segment saw a slight dip in sales, it actually delivered higher operating income than in the first quarter, thanks to improved gross and operating margins.
Fitness Wearables Dominate the Market
The fitness segment remains the standout performer, boasting a 25% year-over-year sales increase driven by advanced wearables. With a 32% growth rate for the first half of the year, Garmin has effectively silenced concerns regarding competition from the Apple Watch and other smartwatch manufacturers.
Furthermore, Garmin is aggressively expanding its total addressable market with innovative products like the Cirqa Smart Band. This screen-free wearable provides comprehensive health and fitness insights without the need for a recurring subscription, appealing to a broader demographic of wellness-conscious consumers.
Valuation and Financial Strength
Despite the stock reaching all-time highs, the company’s valuation remains attractive when looking beyond the surface-level price-to-earnings (P/E) ratio. While the forward P/E sits at 31 based on 2026 guidance—higher than its three-year average of 25—the company’s balance sheet tells a different story.
Garmin ended the second quarter with $4.4 billion in cash and zero debt. This cash pile represents over 7% of the company’s market capitalization, effectively lowering the forward P/E to below 29. This liquidity provides significant optionality for shareholders, whether through future growth investments, strategic acquisitions, share buybacks, or dividend increases. While market conditions may fluctuate, the underlying fundamentals suggest that Garmin remains a compelling prospect for long-term investors.