Hey there. Sorry for the delayed reply. Just trying to finish off a bunch of Premium companies that have reported.
This is a pretty solid company. Strong margins, strong returns on invested capital, a relatively consistent growing dividend since 2018 or so.
My only concern here would be the competition in the niche, particularly in the fitness niche, which is its second largest segment. You see so many companies, Samsung, Apple, Google, etc, much larger cash flow generations and ones that are able to throw a bunch of money at innovations in this area. This is highly likely why that segment has taken a bit of a hit and is still below 2021 levels of revenue.
The one area that I do believe the company is carving out a bit of a niche is in the marine segment. Navigation systems, docking, etc. I don't really think this is a market a lot of the major players are going to tap into.
My only issue here would be from a valuation perspective. I know the entire market is a bit high on the value end of things, but Garmin is even higher. The company is expected to grow earnings in the high single digits over the next year but is trading at 25x expected earnings.
To put this into perspective, Google is expected to grow earnings at a mid double digit pace over the next year but is trading at 18.8x earnings.
As I mentioned, I think the Marine and even to an extent Aviation business is one where they will have a relatively solid chunk of market share and room to grow moving forward. I just feel the valuations are a bit rich at this point.