Garmin: Beware Consumer Hardware As Sales Slow

Garmin surged ~20% post-Q2 despite broad segment sales slowdowns and now trades at historically rich valuation multiples. GRMN guides to $8.05 billion in revenue (11% growth) and $10.00 in pro forma EPS, yet faces decelerating growth and potential lengthening replacement cycles. Gross margin rose to 62.4% aided by one-time tariff refunds, but memory cost headwinds remain unquantified and threaten future profitability. I reiterate a 'Sell' rating: GRMN’s ~3x PEG and high-20s P/E are disconnected from its modest ~10% growth outlook, making it vulnerable to disappointment.

As we move through the thick of the Q2 earnings season, one thing cannot be left in doubt: this is set up to be a very volatile earnings quarter as investors react sharply to the latest news. Apple ( AAPL