Garmin (GRMN) Up 10.2% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Garmin (GRMN). Shares have added about 10.2% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Garmin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.Garmin's Q2 Earnings Beat Expectations, Revenues Increase Y/YGarmin reported second-quarter 2025 pro forma earnings of $2.17 per share, which beat the Zacks Consensus Estimate by 10.7%. Moreover, the bottom line improved 37% on a year-over-year basis.Net sales were $1.81 billion, which beat the Zacks Consensus Estimate by 4.4%. Moreover, the figure increased 20% from the year-ago quarter.GRMN’s year-over-year growth in the top line was attributed to the solid momentum across the Outdoor, Fitness, Aviation, Marine and Auto OEM segments.Garmin’s Segmental DetailsOutdoor (27% of Net Sales): The segment generated sales of $490.4 million in the reported quarter, up 11% year over year, primarily driven by strong performance in adventure watches. Operating income was $158 million, with a 32% operating margin. Our model estimate for the Outdoor segment was pegged at $469.1 million.Fitness (33.4%): The segment recorded sales of $605.4 million, reflecting a 41% year-over-year increase, led by robust demand for advanced wearables. Operating income was $198 million, with a 33% operating margin. Our model estimate for the Fitness segment was pegged at $482.5 million.Aviation (13.7%): The segment achieved sales of $249.4 million, up 14% year over year, fueled by strength in OEM and aftermarket product categories. Operating income came in at $63 million, with a 25% margin. Our model estimate for the Aviation segment was pegged at $245.8 million.Marine (16.5%): Garmin posted sales of $299.3 million, up 10% year-over year due to growth led by chartplotters. Operating income was $63 million, resulting in a 21% margin. Our model estimate for the Marine segment was pegged at $340.4 million.Auto OEM (9.4%): Sales reached $170.2 million, marking a 16% year-over-year increase due to higher domain controller shipments. The segment posted an operating loss of $10 million, with a gross margin of 6%. Our model estimate for the Auto OEM segment was pegged at $185.5 million.Garmin’s Operating ResultsGross profit grew 24% year over year to $1.07 billion in the second quarter. Garmin’s gross margin improved 150 basis points year over year to 58.8%.GRMN’s operating expenses of $595 million grew 14% from the prior-year quarter.Operating income rose 38% year over year to $472.3 million, while operating margin expanded 330 basis points to 26%.Balance Sheet & Cash Flow of GRMNAs of June 28, 2025, Garmin held $2.59 billion in cash and marketable securities, down from $2.67 billion in the previous quarter.During the second quarter, the company generated operating cash flow and free cash flow of $173 million and $127 million, respectively. In the first half of 2025, Garmin generated operating and free cash flows of $594 million and $508.2 million, respectively.Garmin Updates Guidance for 2025Buoyed by a strong second-quarter performance, Garmin raised revenues and EPS guidance for 2025. Garmin now expects 2025 revenues to be $7.1 billion, up from the previous guidance of $6.85 billion. Garmin now anticipates pro forma EPS to be $8.00, up from the earlier projection of $7.80.However, it still expects a gross margin of 58.5% and an operating margin of 24.8% for 2025. The pro forma effective tax rate forecast has been increased to 17.5% from 16.5% projected earlier.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.VGM ScoresAt this time, Garmin has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.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 broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Garmin has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.Performance of an Industry PlayerGarmin belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Flex (FLEX), has gained 9.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.Flex reported revenues of $6.58 billion in the last reported quarter, representing a year-over-year change of +4.1%. EPS of $0.72 for the same period compares with $0.51 a year ago.Flex is expected to post earnings of $0.75 per share for the current quarter, representing a year-over-year change of +17.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.Flex has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>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 Report Flex Ltd. (FLEX): 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