GRMN - Embedded Expectations Analysis - 2020 05 14
Garmin Ltd (GRMN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with an 18.8x Uniform P/E, implying bearish expectations for the firm. However, given management's confidence about their marine segment, Connect IQ, and products, market expectations are overly bearish, suggesting outperformance is likely for GRMN going forwardSpecifically, management is confident about the long-term potential of the marine market, that they are seeing strong end-user demand for their marine products, and that they attempt to create superior products that are an essential part of their customers' lives. In addition, they are also confident they have been very agile in rolling new capabilities for the Connect IQ platform and that the Connect IQ platform has created more engagement and interest in their products
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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