It has been about a month since the last earnings report for Garmin (GRMN). Shares have lost about 5.9% 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 the most recent earnings report in order to get a better handle on the recent catalysts for Garmin Ltd. before we dive into how investors and analysts have reacted as of late.
Garmin's Q1 Earnings Beat Estimates, Revenues Increase Y/Y
Garmin Ltd. reported first-quarter 2026 pro forma earnings of $2.08 per share, beating the Zacks Consensus Estimate by 13%. The bottom line improved 29% on a year-over-year basis.
Net sales were $1.75 billion, which surpassed the Zacks Consensus Estimate by 1.8%. The figure increased 14% from the year-ago quarter.
Garmin’s Segmental Details
Outdoor (23.8% of Net Sales): The segment generated sales of $417.5 million in the reported quarter, which declined 4.8% year over year, primarily due to tough comparison against the prior-year launch of the Instinct 3 smartwatch family. Operating income was $119 million, with a 28% operating margin.
Fitness (31.2%): The segment recorded sales of $546.8 million, reflecting a 42.1% year-over-year increase, led by strong demand for advanced wearables. Operating income was $158 million, with a 29% operating margin.
Aviation (15.1%): The segment achieved sales of $263.8 million, up 18.3% year over year, driven by growth in both OEM and aftermarket categories. Operating income came in at $71 million, with a 27% margin.
Marine (20.2%): Garmin posted sales of $355 million, up 11.2% year over year, as Garmin expanded its portfolio with a new 360-degree scanning sonar system and the quatix 8 Pro nautical smartwatch with inReach technology. Operating income was $91 million, resulting in a 26% margin.
Auto OEM (9.7%): Sales reached $170.3 million, up 0.6% year over year, driven by infotainment programs. The segment reported an operating loss of $6 million.
Garmin’s Operating Results
In the first quarter of 2026, Garmin’s gross margin was 59.4%, expanding 180 basis points year over year. Operating expenses of $611 million increased 11% from the prior-year quarter.
Operating income rose to $432 million, up 30% year over year, with operating margin expanding 290 basis points to 24.6%.
Balance Sheet & Cash Flow of GRMN
As of March 28, 2026, Garmin held $4.3 billion in cash and marketable securities, up from $4.1 billion in the previous quarter.
Operating cash flow for the first quarter of 2026 was $536 million, and free cash flow was $469 million.
The company paid a quarterly dividend of $174 million and repurchased $40 million in shares during the quarter.
Garmin Maintains Guidance for 2026
Garmin expects full-year 2026 revenues to be $7.9 billion, indicating continued growth momentum.
The company projects pro forma EPS of $9.35.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Garmin has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a grade 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Garmin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Garmin Ltd. (GRMN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).