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Is Garmin Stock a Good Buy after Losing 7% Overnight?

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GRMN’s returns

Shares of Garmin (GRMN) fell just below 7% on May 1, 2019, to close the day at $80.06. The stock is currently trading 36% above its 52-week low of $58.71 and 11% below its 52-week high of $89.72.

The stock has been in an upward trend over the last 12 months. Garmin shares have gained 36.5% in the last year and are up 27% since the start of 2019. It’s generated absolute returns of 41% in the last five years and 92% in the last three years.

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Analysts’ recommendations

Of the 15 analysts tracking Garmin, two have given it “buys,” ten have given it “holds,” and three have given it “sells.” Analysts’ 12-month average price target for Garmin is $78.6, and their median estimate is $79. Garmin stock is trading at a premium of 1% to analysts’ median estimate.

Garmin has a forward PE ratio of 20.22x. If we compare this with the company’s expected 2019 earnings growth of 1.6%, we’ll find that the stock seems overvalued at its current price.

What do the technical indicators say?

On May 1, Garmin closed the trading day at $80.06. Based on that price, the stock was trading as follows:

  • 5% above its 100-day moving average of $75.91
  • 6% below its 50-day moving average of $85.38
  • 8% below its 20-day moving average of $87.03

MACD and RSI

Garmin’s 14-day MACD (moving average convergence divergence) is -2.64. A stock’s MACD marks the difference between its short-term and long-term moving averages. Garmin’s MACD score indicates a downward trading trend.

Garmin has a 14-day RSI (relative strength index) score of 27, which shows that its stock is trading well into oversold territory. An RSI score of above 70 indicates that a stock is overbought, while an RSI score of below 30 indicates that a stock is oversold.

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