Key Stats for Garmin Stock
- Current Price: $267
- FY2025 Revenue: $7.25B (+15% YoY)
- FY2025 Pro Forma EPS: $8.56 (+16% YoY)
- Q4 2025 Revenue: $2.125B (+17% YoY, new Q4 record)
- Q4 2025 Pro Forma EPS: $2.79 (+16% YoY)
- FY2026 Revenue Guidance: ~$7.9B (+9% YoY)
- FY2026 Pro Forma EPS Guidance: ~$9.35 (+9% YoY)
- TIKR Model Price Target: $389
Garmin’s Q4 and Full-Year 2025 Earnings: What the Numbers Say
Garmin stock closed out 2025 with a quarter that broke records at every level.
Q4 revenue hit $2.125 billion, up 17% year over year, the first quarter in company history to exceed $2 billion.
Full-year revenue landed at $7.25 billion, up 15% from 2024. Pro forma EPS for Q4 came in at $2.79, up 16%, capping a full-year pro forma EPS of $8.56, also up 16%.
Every business segment set a revenue record for the full year.
The segment driving the most attention is Fitness, which grew 33% to $2.36 billion, surpassing $2 billion for the first time.
CEO Cliff Pemble attributed the growth to volume, not pricing. “Most of our new customers are new to Garmin,” he said, pointing to activation rates as evidence of genuine demand rather than channel-fill.
Outdoor grew 5% to $2.05 billion. Marine grew 10% to $1.18 billion. Aviation grew 13% to $987 million, with operating income rising 22% to $257 million.
The only drag was Auto OEM, which posted a $49 million operating loss. Management expects those losses to narrow in 2026 as BMW domain controller volumes peak and R&D resources shift toward other segments.
Management projects 2026 revenue of approximately $7.9 billion and expects operating income to exceed $2 billion for the first time in company history.
Pro forma EPS guidance of $9.35 is nearly in line with Street consensus of $9.39.
The company also proposed a 17% dividend increase to $4.20 per share annually and announced a new $500 million share repurchase program through December 2028.
On memory cost headwinds, Pemble was direct: the guidance already accounts for it, and the vertically integrated model limits margin exposure compared to peers.
Garmin Stock Financials: Margins Holding Through Tariff Pressure
Garmin stock’s income statement tells a story of margin resilience: gross profit held steady despite tariff pressure, operating leverage continued to build, and the company enters 2026 with its profitability structure largely intact.
Revenue has compounded from $4.98 billion in 2021 to $7.25 billion in 2025, a four-year run that includes only one down year (2022, at $4.9 billion) before accelerating to 20% growth in 2024 and 15% in 2025.
Full-year gross margin held at ~59%, flat versus 2024, a result management described as a meaningful achievement given the 20% tariff structure that took effect earlier in the year.
Operating margin expanded 60 basis points to 26%, and operating income grew 18% to $1.876 billion.
Operating margins had compressed from 24.5% in 2021 to 20.9% in 2023 before recovering sharply: ~25% in 2024 and 25.9% in 2025.
For 2026, management guides operating margin at approximately 26%, a modest step down reflecting higher product costs from memory components, partially offset by favorable segment mix as Fitness grows faster than Auto OEM.
Valuation Model Take and Scenario Breakdown
TIKR’s mid-case model puts Garmin stock’s fair value at $389, implying ~45% upside from the current price of $267.
The model assumes a revenue CAGR of ~7% through 2030 and a net income margin of around 22%, both within the range of what the last two years of results have demonstrated is achievable.
At $267, Garmin stock is trading at a meaningful discount to that target, and the Q4 report does nothing to weaken the case: operating leverage is intact, segment diversification is working, and management guided EPS growth in line with Street expectations without leaning on one-time items.
The central question this report leaves open is whether Garmin’s growth rate moderates more sharply than the 9% 2026 guidance implies, or whether Fitness and Outdoor product cycles sustain the premium multiple the stock has historically commanded.
Bull Case
- Fitness segment guided as the largest contributor to 2026 consolidated growth, with Connect+ conversion rates described as “very, very high” and the Truemed HSA/FSA partnership quickly becoming a significant direct-to-consumer outlet
- Operating income projected to exceed $2 billion in 2026 for the first time, with the model assuming a ~22% net income margin the company has already demonstrated at 23% in 2025
- Mercedes-Benz domain controller program ramps significantly in early 2027, turning Auto OEM from a drag into a growth contributor
- $500 million buyback through December 2028, on top of a 17% dividend increase, signals balance sheet confidence from a company holding $4.1 billion in cash and securities
Bear Case
- 2026 revenue guidance of $7.9 billion marks a step down from 15% growth in 2025 and 20% in 2024, raising the question of whether peak growth is behind Garmin stock
- Gross margin guided at ~59%, down 20 basis points, with memory cost pressures unquantified and management declining to isolate their impact
- Auto OEM carries a $49 million operating loss in 2025 and peak BMW volumes; the Mercedes ramp does not generate material revenue until 2027
- Outdoor growth skewed to the back half of 2026 due to product launch timing introduces H1 execution risk if introductions slip
Should You Invest in Garmin Ltd.?
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