Rating Change #7
Garmin (GRMN - Get Report) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- 49.70% is the gross profit margin for GARMIN LTD which we consider to be strong. Regardless of GRMN's high profit margin, it has managed to decrease from the same period last year.
- Net operating cash flow has slightly increased to $207.60 million or 3.73% when compared to the same quarter last year. In addition, GARMIN LTD has also vastly surpassed the industry average cash flow growth rate of -53.39%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 155.8% when compared to the same quarter one year prior, rising from $37.33 million to $95.48 million.
- GRMN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.59, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth greatly exceeded the industry average of 14.0%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
Garmin Ltd. operates as a holding company and through its subsidiaries, designs, develops, manufactures, and markets global positioning system (GPS) enabled products and other navigation, communication, and information products worldwide. The company has a P/E ratio of 10.3, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Garmin has a market cap of $7 billion and is part of the technology sector and electronics industry. Shares are up 7.3% year to date as of the close of trading on Wednesday.You can view the full Garmin Ratings Report or get investment ideas from our investment research center.