Garmin (GRMN) Down 9.4% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Garmin (GRMN). Shares have lost about 9.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Garmin due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Garmin Ltd. before we dive into how investors and analysts have reacted as of late.Garmin's Q3 Earnings Beat Estimates, Revenues Increase Y/YGarmin Ltd. reported third-quarter 2025 pro forma earnings of $1.99 per share, which beat the Zacks Consensus Estimate by 0.5%. However, the bottom line remained flat on a year-over-year basis.Net sales were $1.77 billion, which missed the Zacks Consensus Estimate by 1.1%. Nonetheless, the figure increased 12% from the year-ago quarter.GRMN’s year-over-year growth in the top line was attributed to solid momentum across the Fitness, Aviation and Marine segments.Garmin’s Segmental DetailsOutdoor (28.1% of Net Sales): The segment generated sales of $497.6 million in the reported quarter, down 5% year over year, due to weak sales in consumer auto and adventure watches. Operating income was $170 million, with a 34% operating margin. Our model estimate for the Outdoor segment was pegged at $559.9 million.Fitness (33.9%): The segment recorded sales of $601 million, reflecting a 30% year-over-year increase, led by robust demand for advanced wearables. Operating income was $194 million, with a 32% operating margin. Our model estimate for the Fitness segment was pegged at $585 million.Aviation (13.6%): The segment achieved sales of $240.4 million, up 18% year over year, fueled by strength in OEM and aftermarket product categories. Operating income came in at $61 million, with a 25% margin. Our model estimate for the Aviation segment was pegged at $213.5 million.Marine (15.1%): Garmin posted sales of $267 million, up 20% year over year. Operating income was $49 million, resulting in a 19% margin. Our model estimate for the Marine segment was pegged at $229.6 million.Auto OEM (9.3%): Sales reached $164.8 million, down 2% year over year. The segment posted an operating loss of $17 million, with a gross margin of 15%. Our model estimate for the Auto OEM segment was pegged at $178.7 million.Garmin’s Operating ResultsGross profit grew 10% year over year to $1.05 billion in the third quarter. Garmin’s gross margin contracted 90 basis points year over year to 59.1%.GRMN’s operating expenses of $590 million jumped 15% from the prior-year quarter.Operating income rose 4% year over year to $456.8 million, while the operating margin contracted 180 basis points to 25.8%.Balance Sheet & Cash Flow of GRMNAs of Sept. 27, 2025, Garmin held $2.54 billion in cash and marketable securities, down from $2.59 billion in the previous quarter.During the third quarter, the company generated operating and free cash flows of $486 million and $425 million, respectively. In the first three quarters of 2025, Garmin generated operating and free cash flows of $1.08 billion and $933.3 million, respectively.Garmin Updates Guidance for 2025Revenues for 2025 are projected at $7.1 billion, unchanged from its previous guidance. Garmin now anticipates pro forma EPS to be $8.15, up from the earlier projection of $8.0.However, it still expects a gross margin of 58.5%. The operating margin for 2025 is projected at 25.2%, up from the previous guidance of 24.8%. The pro forma effective tax rate forecast has remained unchanged at 17.5%.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates review.VGM ScoresCurrently, Garmin has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Garmin has a Zacks Rank #3 (Hold). 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Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Garmin Ltd. (GRMN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks