DCF Studio

    GRMN · NYQ · Technology

    Garmin Ltd.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 170.66

    Market price

    USD 274.29

    Implied upside

    -37.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 3.9% of revenue against depreciation of 3.1%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 24.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 170.66-37.8%
    Exit multiple
    USD 261.33-4.7%
    Market price
    USD 274.29

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 8.1bnUSD 9.1bnUSD 10.1bnUSD 11.1bnUSD 12.1bnUSD 13.0bnUSD 13.7bnUSD 14.4bnUSD 15.0bnUSD 15.3bn+7.3%
    EBITUSD 1.9bnUSD 2.1bnUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 3.0bnUSD 3.2bnUSD 3.4bnUSD 3.5bnUSD 3.6bn+7.3%
    NOPATUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bn+7.3%
    Add depreciation & amortisationUSD 249.1mUSD 279.3mUSD 309.8mUSD 340.0mUSD 368.9mUSD 395.9mUSD 420.1mUSD 440.7mUSD 457.1mUSD 468.5m+7.3%
    Less capital expenditureUSD -316.4mUSD -372.1mUSD -432.0mUSD -495.1mUSD -560.1mUSD -625.6mUSD -689.9mUSD -751.0mUSD -807.2mUSD -856.4m+11.7%
    Capex, % of revenue3.9%4.1%4.3%4.5%4.6%4.8%5.0%5.2%5.4%5.6%-
    Less increase in working capitalUSD -331.5mUSD -363.1mUSD -366.7mUSD -362.0mUSD -348.0mUSD -324.3mUSD -290.7mUSD -247.7mUSD -196.1mUSD -137.3m-9.3%
    Free cashflow to firmUSD 1.2bnUSD 1.3bnUSD 1.5bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.4bnUSD 2.4bn+8.4%
    Discount factor0.95860.88090.80950.74380.68350.62810.57720.53040.48740.4479-
    Present valueUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.1bnUSD 1.1bn-
    Present Value Of The ForecastUSD 11.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.931Reported 0.897, pulled toward 1.0 (Blume)
    Cost of equity8.83%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 52.9bn99.7% of capital
    Total debtUSD 164.8m0.3% of capital, book value as a proxy
    Tax rate16.7%Effective, capped at statutory
    WACC8.82%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 170.66

    61% of EV

    Forecast FCFF, final year
    USD 2.4bn
    Capex at depreciation, working capital in reinvestment
    USD 3.1bn
    Less reinvestment at g/ROIC (16.3% of NOPAT)
    USD -499.6m
    Capitalised
    USD 2.6bn
    ROIC (reported)
    15.3%
    Terminal value, undiscounted
    USD 41.6bn
    Terminal value, discounted
    USD 18.6bn
    Enterprise value
    USD 30.5bn
    Less net debt
    USD -2.6bn
    Equity value
    USD 33.0bn

    Exit at 20.0x EBITDA

    Value per shareUSD 261.33

    75% of EV

    Terminal value, undiscounted
    USD 80.8bn
    Terminal value, discounted
    USD 36.2bn
    Enterprise value
    USD 48.0bn
    Less net debt
    USD -2.6bn
    Equity value
    USD 50.6bn

    Spread between methods: 42%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.82%228.90237.50248.36262.38280.96
    7.82%192.20196.64202.13208.99217.70
    8.82%165.68167.91170.66174.06178.30
    9.82%145.66146.64147.89149.46151.44
    10.82%130.05130.29130.67131.22131.98

    Outlined: this model. Green text: above today's price of 274.29. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year14.2%7.8%14.5%
    EBIT margin25.9%23.3%37.9%
    Discount rate-8.8%6.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.