Why Garmin Stock Hit an All-Time High This Week

Garmin (NYSE: GRMN) has been riding a wave of success in recent years. Once thought of only as a provider of navigation devices, the company now has a loyal following of fitness-oriented consumers, athletes, outdoor enthusiasts, and professionals in the aviation and marine sectors.

That has turned into a growth market for the GPS-enabled device maker, and its prospects continue to grow. This week, the company stunned investors with its fourth-quarter and full-year 2024 results, and shares soared to a record high.

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While the stock has pulled back from its all-time record high of just under $242 per share, as of Friday morning, shares still gained almost 7% this week on the report, according to data provided by S&P Global Market Intelligence. The stock has also jumped almost 90% over the last year.

Planes, boats, and automobiles

Garmin finished the year with sales jumping 20% compared to 2023. Its strong fourth-quarter report showed a 23% increase in revenue year over year, along with expanding gross margin and operating margin. It also ended the quarter with about $3.7 billion in cash and marketable securities. That led it to propose a 20% increase in its quarterly dividend. If approved by shareholders, the stock will yield 1.6% annually at its recent stock price.

Business is thriving in all its segments. Garmin's fitness division led with a 31% year-over-year revenue increase, but sales grew in its outdoor, aviation, marine, and automotive segments as well. The five-year trend shows that Garmin's fitness segment -- which includes GPS-enabled devices for running, cycling, golf, diving, and more -- is quickly approaching outdoor recreation products to become its largest sales category.

Data source: Garmin. Chart by author.

Management sees overall sales growing another 8% in 2025, with earnings rising by 5.5%. Garmin also generates a large amount of cash. Fourth-quarter free cash flow of $399 million easily covered the $144 million paid out in dividends.

That's a recipe for a long-term successful business and investment. It's no wonder investors pushed shares to a new high this week after Garmin's latest results.

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Howard Smith has positions in Garmin and has the following options: short April 2025 $210 calls on Garmin. The Motley Fool has positions in and recommends Garmin. The Motley Fool has a disclosure policy.