Garmin Ltd. (NYSE:GRMN) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 10.0% to hit US$1.6b. Garmin also reported a statutory profit of US$2.07, which was an impressive 46% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Garmin

Taking into account the latest results, the consensus forecast from Garmin's eight analysts is for revenues of US$6.61b in 2025. This reflects a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to drop 12% to US$6.98 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.52b and earnings per share (EPS) of US$6.54 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 8.6% to US$178, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Garmin, with the most bullish analyst valuing it at US$215 and the most bearish at US$149 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 8.7% growth on an annualised basis. That is in line with its 8.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.8% annually. So although Garmin is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Garmin's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Garmin going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Garmin that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.