NEW YORK, July 29, 2026, 14:05 EDT – Shares in Garmin soared 17%, as a sharp margin increase in the second quarter renewed focus on the company’s valuation.
- At 13:48 EDT, Garmin was up 17.4% at $297.66 while U.S. markets continued to trade.
- Pro forma EPS for the second quarter exceeded the FactSet consensus by 22%, while revenue surpassed estimates by around 5%.
- The 2026 EPS projection increased by 7%, which is under half the rise in share price.
Garmin Ltd. NYSE:GRMN jumped 17.4% on Wednesday following record-setting quarterly operating income and an improved forecast. Shares touched $302.59 during intraday trading. The company’s market capitalization was about $57.6 billion. Major U.S. indexes declined.
Revenue increased by 11% to $2.02 billion. Pro forma earnings were up 29% to $2.81 per share. FactSet had projected $1.93 billion in revenue and earnings of $2.30 per share.
The investor indication surpassed the projected increase. Garmin raised its 2026 EPS outlook to $10, up from $9.35. The company also boosted revenue guidance to $8.05 billion from $7.90 billion.
Garmin was valued at 29.8 times the updated EPS target based on Wednesday’s price. At Tuesday’s close, the previous target reflected a multiple of 27.1. The forward multiple grew by roughly 9.7% according to calculations.
The margin figures shed light on the rerating. Operating margin rose to 30.4%, an increase of 440 basis points. Gross margin was lifted by 100 basis points thanks to a $21 million tariff refund.
By calculation, operating margin, excluding the refund, stood at approximately 29.4%. The margin still increased by an estimated 340 basis points. The refund accounted for just 15% of the growth in operating income.
The comparison uses company data, FactSet consensus estimates and the share price as of Wednesday.
| Measure | Reported or new | Comparator | Difference |
|---|---|---|---|
| Q2 revenue | $2.022 billion | $1.93 billion consensus | +4.8% |
| Q2 pro forma EPS | $2.81 | $2.30 consensus | +22.2% |
| Q2 operating margin | 30.4% | 26.0% year earlier | +440 bps |
| 2026 revenue guidance | $8.05 billion | $7.90 billion prior | +1.9% |
| 2026 EPS guidance | $10.00 | $9.35 prior | +7.0% |
| Share price | $297.66 | $253.65 prior close | +17.4% |
Growth was driven by a few segments. Fitness and marine accounted for 93% of Garmin’s sales growth in the quarter. Segment figures show these two segments delivered 81% of the added operating income.
Fitness revenue climbed by 25% to $757 million. Operating income for the segment grew 40% to $277 million. Marine sales were up 14%, with operating income for marine rising 59%.
Outdoor revenue declined by 2%, though profits grew 4%. Sales to auto OEMs increased 1%. This segment posted $3 million in earnings, compared to a loss in the same period a year ago.
Chief Executive Cliff Pemble described first-half performance as “very strong.” He stated this result gave Garmin the confidence to increase its full-year guidance.
Cash flow provided a boost. Garmin reported free cash flow of $276 million for the quarter. The company closed June holding approximately $4.4 billion in cash and marketable securities.
Risks persist. Garmin noted that memory-chip limitations could increase expenses and impact gross margin going forward. Management is also projecting auto OEM revenue to fall in the second half, with the segment likely moving back to an operating loss.
Garmin’s outlook suggests a 26.3% operating margin for the second half, based on early estimates. This is down from 30.4% recorded in the second quarter. The rise in the stock’s multiple indicates investors expect some stability in margins.
