GRMN
Garmin Ltd.
$232.51
Platform & Compounding FCF
65%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 19.4% above fair value
You pay
$232.51
Bear
$142.30
Fair
$194.69
Bull
$248.27
Bear
$142.30
-38.8%
7% stage 1 growth, 11% discount
Fair
$194.69
-16.3%
12% stage 1 growth, 11% discount
Bull
$248.27
+6.8%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
34.1x
Market is pricing in (growth)
16.1%
vs 11.6% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $270.67 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $194.69 per share.
Warnings
Wall Street's average price target is $270.67 (from 28 analysts). Our estimate is 37% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions