Will This Analyst Downgrade Hurt Garmin (GRMN) Stock Today?

NEW YORK (TheStreet) -- Pacific Crest downgraded Garmin  (GRMN) to "underperform." The firm said negative catalysts offer risk to estimates over the next 6 to 12 months. 

The stock was down 2.03% to $59.40 in pre-market trading on Wednesday.

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Separately, TheStreet Ratings team rates GARMIN LTD as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate GARMIN LTD (GRMN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Household Durables industry average. The net income increased by 34.0% when compared to the same quarter one year prior, rising from $88.67 million to $118.82 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 17.4%. Since the same quarter one year prior, revenues slightly increased by 9.6%. 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. Along with this, the company maintains a quick ratio of 2.54, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 35.55% and other important driving factors, this stock has surged by 73.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GRMN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for GARMIN LTD is rather high; currently it is at 58.73%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.37% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: GRMN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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