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While the digital innovation space offers no shortage of upside opportunities, wearable technology stocks could offer a distinctly compelling prospect. We’re not just talking about innovation for its own sake but rather one that has significant everyday practicality.
Even better, the market itself has responded enthusiastically to the burgeoning field. According to Grand View Research, the global wearable tech space reached a valuation of $61.3 billion in 2022. Experts believe that the segment could expand at a compound annual growth rate (CAGR) of 14.6% from 2023 to 2030. At the end of the forecast period, the industry could be worth $186.14 billion.
Stated differently, this sector is on the upswing. Here are some wearable technology stocks that could benefit.
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Garmin (GRMN)
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A multinational tech firm, Garmin (NYSE:GRMN) specializes in myriad innovations. Primarily, the company is best known for its GPS systems for automotive, aviation, marine, outdoor and sport activities. It’s also rose to the forefront as one of the wearable technology stocks thanks to its activity trackers and smartwatches. Still, GRMN presents a tricky narrative.
How so? Well, shares are up over 16% since the beginning of the year and have shot more than 53% higher in the past 52 weeks. Therefore, some natural concerns exist about the forward viability. And yes, with a forward earnings multiple of 28.23X, investors are paying a premium for the per-share profitability growth.
However, in a tight consumer market, Garmin could solidify itself as a top-tier player. Further, analysts believe that in fiscal 2024, sales will land at $5.73 billion, almost 10% above last year’s print of $5.23 billion. In 2025, they anticipate revenue to reach $6.25 billion, thus potentially representing 9% year-over-year growth.
Yes, it’s a consensus hold and the average price target of $148.50 isn’t much. However, the high-side target of $175 (the most recent estimate) could be more reflective of current realities.
Xiaomi (XIACY)
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A Chinese designer and manufacturer of consumer electronics, Xiaomi (OTCMKTS:XIACY) is also involved in multiple industries. These include home appliances, automobiles, and household hardware. Per its public profile, Xiaomi is the second-largest manufacturer of smartphones in the world. So far this year, XIACY has been choppy, losing more than 5% of its equity value.
Nevertheless, Xiaomi represents one of the top players in wearable technology stocks. Essentially, as the innovation becomes more commoditized, the company can leverage its economies of scale and manufacturing prowess to rough up the competition. Not only that, in some ways, economic troubles might help XIACY. Essentially, people may be reluctant to pay top dollar for tech brands when a generic alternative will do just fine.