Garmin’s Growth Signals Wearables Surge: Stocks to Watch

Key Points

• Garmin's stock price surged following the Q4 results and 2025 guidance, driven by strong consumer demand for wearables. 
• Stocks like Meta Platforms, Apple, and Logitech are well-positioned to benefit from the trend. 
• Capital returns, including a proposed 20% dividend increase, will help sustain Garmin's uptrend. 

Garmin’s NYSE: GRMN Q4 results and 2025 guidance sent its shares to new highs because of broad-based strength centered in consumer products. Its fitness and outdoor segments led with high double-digit growth driven by demand for wearables across categories.

Wearables, or technology used while worn, range from watches to jewelry, glasses, and VR headsets and are a large and fast-growing segment. Estimated to be worth upwards of $70 billion at the end of 2024, the wearables market is forecasted to grow at a mid-teens or higher CAGR through the middle of the next decade, a significant tailwind for the company and its competitors. 

These Consumer Technology Companies are Poised for Growth in 2025

Competitors likely to benefit from the trends impacting Garmin include Apple NASDAQ: AAPL, Meta Platforms NASDAQ: META, Logitech NASDAQ: LOGI, and Ambarella NASDAQ: AMBA. Apple is a well-known manufacturer of portable and wearable technology, including watches, headphones, and earbuds. Its business outperformed in CQ4 2024 despite weak iPhone sales in China. The outlook for 2025 is for revenue growth to accelerate with the help of new product launches and AI. 

Meta Platforms is not as well known in consumer product circles, working over the past few years to advance virtual reality. A catalyst for it in 2025 is improving its Ray-Ban smart glasses sales and the potential for mass-market appeal akin to the iPhone. Sales of the glasses are forecasted to accelerate as the year progresses, aided by advancing VR capability, including the inclusion of Meta’s AI assistant. 

Logitech is a leading peripherals manufacturer and is well-positioned for the wearables technology market. It offers a wide range of products to enhance the digital experience, including headsets and VR. Its F2024 results include steady growth, outperformance, and improved guidance for 2025 above the consensus at the year’s start.

Ambarella, a less obvious winner, is no less well-positioned. Its advanced imaging and computer vision technology is used in numerous portable and wearable applications, including trail cams and personal security devices. Its business reverted to growth in F2025 and is expected to accelerate in F2026, putting it on track to reach profitability by the end of the next fiscal year. 

Garmin Stock to Trend Higher in 2025

Garmin had a solid Q4 with strength in all segments, leading to outperformance. The $1.82 billion net revenue is up 23% compared to the prior year on double-digit gains in Fitness and Outdoor products offset by smaller increases in Aviation and Marine. Automotive OEM was also strong, with a 30% gain. The revenue strength carried through to the bottom line, adding leverage to fixed costs and driving accelerated earnings growth.

Adjusted earnings are up 40% compared to the prior year, 2000 basis points better than MarketBeat’s reported consensus; ad margin is expected to remain strong in 2025. The guidance is for high-single-digit revenue growth and EPS in the range of $7.80, above the consensus forecast, and similar growth in earnings. 

As good as the business is, the outlook for cash flow and capital return has the stock price in its uptrend. The company’s dividend yield is near 1.25%, with the shares at all-time highs in mid-February, comparable to the S&P 500 average, and expected to grow. The company proposes a 20% increase for 2025 and only needs the board's approval to follow through. As it is, the payout is less than 40% of the 2025 earnings outlook and backed up by a fortress balance sheet. 

Garmin Sets New High: Uptrend Is Intact

Garmin’s price action showed signs of resistance at new all-time highs, but new all-time highs were set. The move broke the market from a consolidation range and indicates the uptrend will continue. The risk is that the post-release highs will cap gains in early 2025, minimizing the upside, but institutional activity mitigates it. Institutional activity spiked in Q1, with buying and selling hitting multiyear highs and buying volume outpacing sellers significantly.