(Bloomberg) -- Garmin shares rallied 17 percent to their highest level in 11 years as demand for watches from outdoor enthusiasts helped fourth-quarter earnings beat the highest estimates.
“Their smart wearable business is on fire,” Tigress Financial Partners Chief Investment Officer Ivan Feinseth said in a phone interview. “They are becoming a leader in fitness wearables.”
Revenue from Garmin's outdoor segment increased 25 percent in the quarter “with significant contributions from adventure watches,” the company said in a statement Wednesday. Garmin forecast 2019 revenue of about $3.5 billion, surpassing the $3.43 billion average estimate of analysts surveyed by Bloomberg. The consumer-electronics maker also highlighted the launch of new products including Descent, a watch for divers.
Garmin shares have long been undervalued by the Street, according to Feinseth. “This move is well-deserved.”
Competitors also rose after the report, with Fitbit Inc. increasing as much as 3.8 percent, Fossil Group Inc. adding as much as 2 percent.
Feinseth is also bullish on Garmin's announcement last week that it will buy Tacx, a closely held Dutch company that makes indoor bike trainers. Feinseth called it an “incredible acquisition” and sees the combination of Tacx and Garmin's fitness-tracking technology as a “serious competitor to Peloton.”
To contact the reporter on this story: Natasha Rausch in New York at nrausch@bloomberg.net
To contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.net
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