Missed Garmin's Run? Here's The Bet Holders Made

If Garmin was on your watchlist instead of in your portfolio, the gain over this stretch may feel like a missed call. For Garmin shareholders, the return from the start of the year was 42.4%, including dividends. That kind of move invites a blunt question. Back on 1 January 2026, when bulls talked up premium services and wearables resilience and bears warned about smartphone cannibalisation, what conviction about Fitness segment demand would have justified owning the stock before that surge showed up on the screen?

A Narrative on Simply Wall St is one investor's written case for a company, with its growth, margin and multiple assumptions spelled out. Those assumptions imply an estimated Fair Value.

If the move has made Garmin harder to judge, start where the gap is still open and scan 33 high quality undervalued stocks.

The Argument You Would Have Been Weighing Up On Garmin

The shares cost US$203 at the start. Anyone thinking about Garmin then had to decide whether premium services and high end wearables could stay in demand or whether smartphones and regulation would slowly squeeze the business.

The bullish Narrative put Fair Value at US$215, 6% above the start price. It leaned on Fitness and services, assuming revenue growth of 8.2%, a 21.4% profit margin and a future P/E of 28.3x within three years.

The bearish view marked Fair Value at US$167, 18% below the start price. That case stressed smartphone cannibalisation and tighter rules on connected devices as threats to Garmin's pricing power and profitability.

What The Results Changed For The Garmin Debate

Garmin then posted Q2 2026 figures with revenue at US$2,022.1m and net income at US$541.9m. Net margin moved to 26.8%, above the 21.4% assumption in the bullish Narrative and above the prior 22.1% level. That profitability profile gave more weight to the optimistic case on Fitness and services, although it did not settle how durable that strength will be.

The episode turned on one assumption: that premium wearables and services could support higher profitability. When you look at another stock built on a similar claim, compare the story against the reported net margin and segment mix rather than just top line growth.

What Garmin's Run Up 42% Already Prices In

Garmin shares are now at US$285 from the start of the year and this selected Narrative puts Fair Value below that level, which means its author sees the current tag as demanding.

The argument focuses less on disruption and more on whether subscription, premium Fitness and capital-heavy manufacturing can keep margins high. A buyer today is effectively assuming those earnings stay resilient, so how do rising component costs and Auto OEM losses affect that bet?

"The main thing that has to go right is that Garmin converts strong Fitness, Aviation, Marine and subscription performance into durable, high-margin earnings despite rising input costs and upcoming Auto OEM losses. The numbers imply the share price already reflects sustained high revenue, margin and free cash flow levels, so there is limited room for disappointment if any of these pillars weaken."

The price and this Narrative do not agree. → Uncover what this Narrative says Garmin is actually worth

Go Straight To The Source

You may be late to this rally, but that does not have to mean arriving late to every opportunity. Start with companies whose prices leave room for a different view of their future. Here are three trading below our estimates.

• Company 1 - 46% below our estimate - turns a record backlog of data center builds into higher margin services.
• Company 2 - 42% below our estimate - converts specialized PhD expertise into recurring projects on AI safety and regulation.
• Company 3 - 47% below our estimate - expands online betting and gaming as users migrate from physical venues to apps.

Those are three of them. See all 25 companies with the balance sheet to back it up →

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.

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