Global positioning satellite-based (GPS) navigation was once only available through stand-alone GPS devices. Many analysts believed the widespread penetration of smartphone-based GPS navigational apps in the computer and technology sector, like Alphabet Inc. NASDAQ: GOOGL owned Google Maps and Waze, Apple Inc. NASDAQ: AAPL owned Apple Maps and MapQuest would have surely been the death of GPS devices. In the same way that Netflix ushered in the dawn of streaming entertainment and the death of Blockbuster Video, smartphone navigational apps were expected to end the need for handheld navigation devices. But that's not the case. Here are 2 GPS navigation stocks that are still thriving and continue to defy gravity.
Garmin
Switzerland-based Garmin Ltd NYSE: GRMN was one of the pioneers of GPS navigational devices. The company has expanded its range of wireless devices to include fitness and smartwatches to its portfolio of outdoor handheld GPS devices. Garmin has sought to specialize its products to specific user groups that demand a handheld navigational device that is rugged, waterproof, high-precision, has advanced features, and can be used offline. Specialization has been the key to success. Garmin's products are a mainstay in the industry by delivering these attributes in products that can be used in applications such as fitness tracking, aviation, auto, and marine navigation.
Steady Growth
Garmin reported Q4 2023 EPS of $1.72, beating analyst estimates by 32 cents. Revenues rose 13.3% YoY to $1.48 billion, beating consensus analyst estimates of $1.41 billion. Gross margins expanded 130 bps to 58.3% from 57% in the year-ago period. Operation margins improved to 23% versus 20% in the year-ago period.
For full-year 2023, the company recorded record revenues of $5.23 billion, up 8% YoY. Its Aviation, Marine and Auto OEM segments each had record full-year revenues. The company announced a $300 million stock buyback program good until December 26, 2026. The Board of Directors authorized a $3.00 per share dividend paid in four quarterly installments with dates to be determined by the Board.
Growth by Segment
Its fitness segment saw 22% YoY growth in Q4 2023, led by strong demand for wearables. The outdoor segment saw revenues rise 8% YoY, led by adventure watches. It expanded its dive offerings with the launch of the Descent G1 Solar-Ocean Edition, made of recycled ocean-bound plastics. The aviation segment decreased by 4%. The marine segment revenues rose 14% YoY due to contributions from the JL Audio acquisition. Garmin launched the ECHOMAP Ultra 2 chartplotter series with premium sonar, mapping and wireless networking features for nearshore and inland anglers. Its auto OEM segment saw a 54% increase in revenues due to the shipment of infotainment and instrument cluster domain controller deliveries to BMW Group. These control various in-car features, from navigation to audio, Bluetooth connectivity and smartphone integration. Check out the sector heatmap on MarketBeat.
Accolades
Garmin received 6 Innovation Awards at the 2024 Consumer Electronics Show for its Venu 3, Epix Pro, MARQ Golfer-Carbon Edition and Garmin's Autoland retrofit. Its Eve Air Mobility selected the G3000 Integrated Flight Deck for its electric vertical takeoff and landing (EVTOL) aircraft.
Force Kraken was selected for a Marine Power Innovation Award by Boating Magazine. Garmin was ranked #1 for the 20th consecutive year in Professional Pilot's 2024 Avionics Manufacturing Product Support Survey.
Mixed Full-Year 2024 Guidance
Garmin sees full-year EPS between $5.40 versus $5.56 consensus estimates. Full-year 2024 revenues are expected to be around $5.75 billion versus $5.56 billion consensus estimates.
Here's Why Garmin Handheld Devices are Still Around After 20 Years
Garmin CEO Clifton Pemble commented, "For over two decades, our eTrex series of handhelds have been an essential product for outdoor adventures. We recently launched the eTrex Solar, our first handheld GPS with solar charging technology."
Pemble continued, "This new handheld can operate indefinitely using only the power harvested from the sun, which is a game changer for hikers, explorers and off-the-grid adventurers. Looking ahead, we expect that our strong outdoor product roadmap will result in revenue growth of 7% for the year."
Garmin analyst ratings and price targets are at MarketBeat. Garmin's peer and competitor stocks can be found with the MarketBeat stock screener.
Daily Bull Flag Breakout
The daily candlestick chart on GRMN illustrates a bull flag breakout pattern. The flagpole formed at $99.04 on Oct. 27, 2023. Shares surged on the daily market structure low (MSL), triggering a breakout through $101.10 on its Q3 2023 earnings report. Amazingly, shares continued to climb in steady increments up to $128.89, where it peaked and started to form the flag as shares pulled back making lower highs and lower lows in a parallel channel. The bull flag breakout occurs on the Q4 2023 earnings release, gapping shares up to $128.89 and peaking at $137.87. The daily relative strength index (RSI) surged through the 70-band. Pullback support levels are at $128.89, $123.46, $113.83 and $105.88.
Trimble
While Garmin's products target consumers and recreational users, Trimble Inc. NASDAQ: TRMB caters to professional and enterprise customers. Their products and services as both a hardware and software company are used in various industries, from agriculture, construction, infrastructure and transportation to natural resources, geospatial, utilities and government. Their products go beyond GPS navigation. Thus, the company's name was changed to Trimble from Trimble Navigation in 2016.
Industrial Technology
Trimble deems itself an industrial technology company that enables jobs to be performed more efficiently, precisely and accurately. Its products are concentrated on improving workflows. Their products are used to collect data and administer analytics to create solutions. They have mixed, augmented, and extended reality technology to visualize the physical environment using holographic data suitable for the construction industry. The company is also riding the digital transformation wave as it migrates to a subscription model for its software solutions.
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Thriving More Than Surviving
On February 12, 2024, Trimble reported Q4 2023 EPS of 63 cents, beating consensus estimates by 3 cents. GAAP net income was $64 million, and non-GAAP net income was $156,6 million. Adjusted EBITDA was $241.2 million and 25.9% of revenues. Revenues grew 8.9% YoY to $932.4 million, beating $910.11 million consensus estimates. Trimble hit record annualized recurring revenue (ARR) up 24% to $1.98 billion. Gross margins rose 470 bps to 64.7% at the end of the year. This compares to 58% five years ago.
Lowered Guidance
Trimble guided down its Q1 2024 EPS of 57 cents to 62 cents versus 67 cents consensus analyst estimates. Revenue expectations were lower to $905 million to $935 million versus $981.73 million consensus estimates. According to consensus estimates, the full-year 2024 EPS is expected to be between $2.60 and $2.80 versus $2.69. Full year 2024 revenues are expected to be between $3.57 billion and $3.67 billion versus $3.83 billion consensus estimates.
Trimble CEO Rob Painter commented, "Geographically speaking, North America has been overall healthy. Europe remains quite challenged. The agriculture and transportation markets face macro headwinds as a result of commodity prices and overcapacity in trucking. The engineering and construction markets have proved to be more resilient, with puts and takes across sub-segments." Painter concluded, "Control what we control is the operating theme in place. "
Trimble analyst ratings and price targets are at MarketBeat.
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