Garmin Ltd. Stock Upgraded (GRMN)

NEW YORK (TheStreet) -- Garmin (Nasdaq:GRMN) 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, solid stock price performance, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:

• The revenue growth greatly exceeded the industry average of 30.7%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
• 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. To add to this, GRMN has a quick ratio of 2.05, which demonstrates the ability of the company to cover short-term liquidity needs.
• Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
• The gross profit margin for GARMIN LTD is rather high; currently it is at 60.60%. It has increased significantly from the same period last year.
• Net operating cash flow has slightly increased to $222.91 million or 9.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.17%.

Garmin Ltd., together with its subsidiaries, designs, develops, manufactures, and markets global positioning system (GPS) enabled products and other navigation, communication, and information products for the automotive/mobile, outdoor, fitness, marine, and general aviation markets worldwide. The company has a P/E ratio of 14.7, 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 $8.03 billion and is part of the technology sector and electronics industry. Shares are down 3% year to date as of the close of trading on Thursday.

You can view the full Garmin Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

 

For more information on Garmin Ltd. click any of the following:

• Garmin Ltd. Stock Price

• Garmin Ltd. Analyst Ratings

• Garmin Ltd. Key Stats & Profile

• Garmin Ltd. Earnings

• Garmin Ltd. Ratio Comparison

• Garmin Ltd. Growth Rates

• Garmin Ltd. Balance Sheet

• Garmin Ltd. Cash Flow

• Garmin Ltd. Income Statement