Garmin makes GPS-based navigation devices for cars, motorcycles, aviation and fitness equipment, and that market for consumer-targeted navigation products is hot. Personal navigation devices shipments are estimated to grow fourfold from 2006 and reach worldwide revenue of $16.5 billion in 2013, according to research firm iSuppli. TomTom, which is based in Amsterdam, Netherlands, is the global market leader with about 37% market share, followed by Garmin at 25%. Garmin is the industry leader in the U.S. Even with expectations for a strong third quarter, the stock's rich valuation has worried some portfolio managers, including Joe Biondo Jr., chief investment officer for Biondo Investment Advisors. "Garmin has been one of our better holdings this year but going into earnings I am a little bit less aggressive than I have been in the past," says Biondo. Biondo estimates Garmin will report earnings of $4 to $4.50 a share for fiscal 2008 (Analysts polled by Thomson Financial expects EPS of $4.07). That means at today's price, Garmin is trading at least 30 times next year's numbers, he says. "I will continue to own the stock but I have trimmed it back over the past month because of the appreciation," says Biondo. "The risk-reward ratio is getting less attractive now." Analysts and managers will be watching gross margins, which could become an issue for the company as it faces increased competition and falling prices in the personal navigation devices market.