Garmin’s Earnings and Sales Growth in 2019 and Beyond

The wearable market continues to grow at a strong pace. The global wearable market shipments rose 31.4% year-over-year in the fourth quarter of 2018. The shipments also rose 27.5% in 2018. The shipments are expected to rise by double digits in 2019.

Garmin (GRMN) is competing with tech giants including Apple, Samsung (SSNLF), and China’s (FXI) Huawei and Xiaomi. These companies have huge cash reserves. The companies could hurt smaller players’ presence.

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Garmin is expected to underperform the wearable market. The company’s sales are estimated to rise 5.1% to $3.52 billion in 2019. The revenues are estimated to rise 4.4% to $3.67 billion in 2020 and 5.1% to $3.86 billion in 2021.

Garmin’s non-GAAP EPS is expected to rise 1.6% in 2019 to $3.75 from $3.69 in 2018. The company’s EPS is expected to rise 5.3% to $3.95 in 2020.

Analysts expect Garmin’s EPS to rise at a compound annual growth rate of 5.9% over the next five years—compared to its EPS growth of 5.5% in the last five years.

Garmin posted an operating margin of 23.2% in 2018. The operating margin could fall to 22.7% in 2019 and expand to 23.3% in 2020 and 23% in 2021.

Garmin’s net margin was at 20.7% last year. The net margin is expected to fall to 20% in 2019 and expand to 20.5% in 2020.