March 8, 2019

Valens Research Weekly Equity Idea Highlight for March 6, 2019 – Garmin Ltd.


Markets are pessimistic about Garmin, but strong improving returns, favorable management alignment, and improving fundamental momentum have guided a course correction the market will eventually recognize

Market expectations for GRMN are currently very pessimistic. The market is expecting UAFRS-based (Uniform) ROA (ROA’) to fade from 78% in 2018 to 31% in 2023, with Uniform Asset growth slowing to 10% a year going forward. The market appears to be concerned about their legacy GPO business and competition there, while the company has been focused on building other businesses around their GPO business, to defend that moat and expand to higher value add services.

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