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Markets expect GRMN to see Adjusted ROA fade from current 17% levels to historically low levels of 11% over the next 5 years, however, there are reasons to believe this is unwarranted
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Particularly, management is confident about recent gross margin improvements and about their incremental growth opportunities outside of navigation, which should help them maintain current margins and exceed growth expectations
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GRMN currently trades at a 2.2x Adjusted P/B metric, which is in line with its peer group, but with strong growth prospects, there is potential for multiple expansion with limited equity downside
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GRMN’s returns are materially distorted by how as-reported GAAP accounting treats R&D as an expense as opposed to an investment
Submitted May 15, 2017 at 10:07PM by Valens_Research http://ift.tt/2qlZkt5
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