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Garmin GRMN recently unveiled the ultimate GPS bike computer Edge 1040 Solar to expand its fitness offerings, which in turn, will strengthen the fitness segment.
Garmin’s fitness segment has been performing poorly so far in 2022 due to declining sales of cycling products, reflecting the normalization of demand from the pandemic-induced demand hike. Notably, the segment generated sales of $220.9 million in the first quarter of 2022, down 28% from the year-ago quarter’s level.
GRMN expects its fitness segment to perform moderately in the second half of this year as a result of post-pandemic normalization and benefits from product releases.
Apart from softness in the fitness segment, Garmin is facing the negative impacts of coronavirus-induced supply-chain constraints, high freight costs, increased operating expenses, unfavorable forex and the ongoing Russia-Ukraine war.
Shares of Garmin have been down 24.4% in the year-to-date period, lagging the Computer and Technology sector’s decline of 24.2% over the same time frame.
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Edge 1040 Solar: Brief Overview
Garmin’s latest product Edge 1040 Solar is equipped with solar charging capability, offering ride time of up to 100 hours in battery saver mode.
The bike computer features multi-band GNSS technology, which provides better GPS positional accuracy and coverage, even in challenging ride environments.
Cyclists can receive performance insights on the Edge 1040 Solar from Firstbeat Analytics like VO2 max, recovery time, training load, training focus and more. They can also sync their workouts automatically from Garmin Connect or other training apps to the bike computer.
Edge 1040 Solar also provides safety, tracking and connectivity features, including incident detection, assistance and LiveTrack so that cyclists can stay in touch with their friends and families.
With the introduction of Edge 1040 Solar, Garmin has expanded its presence in the booming GPS bike computers market, which is witnessing growth in recent times owing to the rising awareness of fitness and resultant growing demand for recreational bicycle activities.
Per the Mordor Intelligence report, the underlined market is likely to hit $768 million by 2027, witnessing a CAGR of 6% between 2022 and 2027.
Expanding Offerings for Cyclists
Apart from the recent launch of Edge 1040 Solar, Garmin introduced the Varia RCT715 rearview radar last month, featuring camera and tail light. The device aims to provide cyclists with enhanced visibility of approaching vehicles during a ride.
In March 2022, Garmin unveiled the Tacx NEO Motion Plates, which provides movement flexibility and allows trainers to adopt a natural riding position for effective training. Moreover, the plates offer a better training experience to cyclists by providing them with a feeling of riding outdoors.
The consistent introduction of cycling offerings highlights Garmin’s focus on providing an enhanced riding experience to the cyclists.
This is expected to help Garmin gain momentum among cyclists, which in turn, is likely to contribute to its top line in the days ahead.
Zacks Rank & Stocks to Consider
Currently, Garmin carries a Zacks Rank #3 (Hold). Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Avnet AVT, Aspen Technology AZPN and Amdocs DOX. While Avnet and Aspen technology sport a Zacks Rank #1 (Strong Buy), Amdocs carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avnet has gained 17.4% in the year-to-date period. The long-term earnings growth rate for AVT is currently projected at 37.2%.
Aspen technology has returned 35.7% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 18.4%.
Amdocs has gained 14.2% in the year-to-date period. The long-term earnings growth rate for DOX is currently projected at 10%.
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