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Today we're going to take a look at the well-established Garmin Ltd. (NYSE:GRMN). The company's stock maintained its current share price over the past couple of month on the NYSE, with a relatively tight range of US$102 to US$108. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Garmin’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Garmin
Is Garmin Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% below my intrinsic value, which means if you buy Garmin today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $123.98, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Garmin’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Garmin?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Garmin's earnings over the next few years are expected to increase by 25%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in GRMN’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on GRMN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
It can be quite valuable to consider what analysts expect for Garmin from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.