Why Is Garmin (GRMN) Down 2% Since Last Earnings Report?

It has been about a month since the last earnings report for Garmin (GRMN). Shares have lost about 2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Garmin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Garmin's Q4 Earnings Beat Estimates, Revenues Increase Y/Y

Garmin Ltd. reported fourth-quarter 2025 pro forma earnings of $2.79 per share, beating the Zacks Consensus Estimate by 16.6%. The bottom line improved 16% on a year-over-year basis.

Net sales were $2.12 billion, which surpassed the Zacks Consensus Estimate by 5.6%. The figure increased 16.6% from the year-ago quarter.

GRMN’s year-over-year growth in the top line was attributed to the solid momentum across Outdoor, Fitness, Aviation, and Marine segments, partially offset by the Auto OEM segment.

Garmin’s Segmental Details

Outdoor (29.5% of Net Sales): The segment generated sales of $627.6 million in the reported quarter, which remained year over year, primarily due to tough comparisons against prior-year product launches. Operating income was $233.9 million, with a 37% operating margin.

Fitness (36.0%): The segment recorded sales of $765.8 million, reflecting a 42% year-over-year increase, led by strong demand for wearables. Operating income was $256.9 million, with a 34% operating margin.

Aviation (12.9%): The segment achieved sales of $274.2 million, up 16% year over year, driven by growth in both OEM and aftermarket categories. Operating income came in at $84.7 million, with a 31% margin.

Marine (14.0%): Garmin posted sales of $296.9 million, up 18% year over year, led by chartplotter demand. Operating income was $52.1 million, resulting in an 18% margin.

Auto OEM (7.5%): Sales reached $160.4 million, down 3% year over year due to certain legacy programs nearing end-of-life. The segment reported an operating loss of $13.5 million, with a gross margin of 17%.

Garmin’s Operating Results

In fourth-quarter fiscal 2025, Garmin’s gross margin was 59.2%, down 10 basis points year over year. Operating expenses of $644 million increased 14% from the prior-year quarter.

Operating income rose to $614 million, up 19% year over year, with operating margin expanding to 28.9%, up 60 basis points.

Balance Sheet & Cash Flow of GRMN

As of Dec. 27, 2025, Garmin held $2.67 billion in cash and marketable securities, up from $2.54 billion in the previous quarter.

Operating cash flow for the fourth quarter of 2025 was $554 million, and free cash flow was $430 million.

The company paid a quarterly dividend of $173 million and repurchased $51 million in shares during the quarter.

Garmin Initiates Guidance for 2026

Garmin now expects full-year 2026 revenues of $7.9 billion, reflecting continued growth momentum.

It also expects a gross margin of 58.5%, an operating margin of 25.5%, and a pro forma effective tax rate of 16.0%.

The company projects pro forma EPS of $9.35.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

Currently, Garmin has a subpar Growth Score of D, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Garmin has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Garmin belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Flex (FLEX), has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Flex reported revenues of $7.06 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $0.87 for the same period compares with $0.77 a year ago.

Flex is expected to post earnings of $0.86 per share for the current quarter, representing a year-over-year change of +17.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Flex has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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