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Garmin (GRMN) Aids Automotive Segment Via Tread Audio Systems

Garmin GRMN is consistently working toward expanding its automotive portfolio of solutions.

This is evident from the fact that GRMN recently released the all-in-one Tread Audio System with LED Controller featuring audio sources for AM/FM, AUX and the Bluetooth technology.

The latest stereo system is designed to provide high quality audio with colorful lights while withstanding the rigor of any off-road adventure.

The Tread Audio system can be controlled by a wireless remote. The system can also be controlled by pairing it with the Tread app on a smartphone or the Tread navigator.

With the recent stereo system, Garmin aims to provide an enhanced audio experience to drivers on the road. This is expected to help GRMN gain momentum among them, which is likely to contribute to its top-line growth in the days ahead.

This, in turn, is expected to help Garmin win investors’ confidence in the near and the long term.

Shares of Garmin have been down 22.6% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 27.6%.

Garmin Ltd. Price and Consensus

Garmin Ltd. Price and Consensus
Garmin Ltd. Price and Consensus

Garmin Ltd. price-consensus-chart | Garmin Ltd. Quote

Efforts to Boost Prospects

With the introduction of Tread Audio System, Garmin expanded its presence in the booming audio equipment market.

The market is witnessing significant growth owing to rising demand for wireless audio services and technological advancements in the music industry. Increase of audio equipment in automobiles is also creating growth in this market.

Per The Business Research Company report, the underlined market is expected to hit $42.4 billion in 2026, witnessing a CAGR of 5.4% between 2022 and 2026.

Expanding Automotive Offerings

Along with the latest Tread Audio system, Garmin introduced the BC 50 and BC 50 with night vision wireless backup cameras to help drivers view the back of their vehicles and reverse confidently.

GRMN also unveiled the dezl Headset series featuring high-quality audio, active noise cancellation and battery life of up to 50 hours to provide a better travel experience to drivers on the road.

In addition, Garmin launched the Instinct 2 – dezl Edition smartwatch to help truck drivers keep track of their health while being on the road.

With the consistent increase in the number of automotive solutions, Garmin is bolstering its automotive segment, which became integral to it.

The automotive segment generated sales of $579.5 million, accounting for 12% of total 2021 revenues. Also, revenues were up 26% on a year-over-year basis.

However, Garmin is experiencing weak momentum across the auto OEM programs and consumer auto products. This remains a major headwind.

Zacks Rank & Stocks to Consider

Currently, Garmin carries a Zacks Rank #5 (Sell).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Keysight Technologies KEYS, ASE Technology ASX and AMETEK AME, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Keysight Technologies has lost 19.9% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.

ASE technology has lost 23.2% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.

AMETEK has lost 14.5% in the year-to-date period. The long-term earnings growth rate for AME is currently projected at 9.3%.


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