Garmin (NYSE: GRMN) stock was soaring on Wednesday after the company shocked investors with a standout quarterly report. Just nine months ago, management at the company that designs and sells GPS-enabled navigation and recreation devices said to expect about a 10% increase in 2024 revenue compared to last year.

Now, after another strong quarter, Garmin said sales should be more than 17% higher this year. And that’s not the only reason the stock was soaring by 23.7% as of 11:40 a.m. ET. With today’s surge, Garmin shares have risen by 60% year to date.

Improving profitability and plenty of cash

Garmin boosted sales in each of its five segments in Q3. New outdoor adventure products like its Fenix 8 and Enduro 3 were launched in the third quarter, helping boost sales in the outdoor segment. Year-over-year revenue for each segment increased as follows:

• Fitness: 31%
• Outdoor: 21%
• Aviation: 3%
• Marine: 22%
• Auto (original equipment manufacturer): 53%

But it wasn’t just about growing sales. It’s clear that Garmin is cutting costs in multiple places. It raised gross margin expectations for the full year by 150 basis points to 58.5%. And management said operating profit — which takes operating costs into account — should be 24% for 2024. That compares to just 21.1% last year and is a meaningful increase from the prior guidance from the company.

While Garmin is moving more like a growth stock today, income investors should also feel good about owning shares. The company has a history of raising its dividend, and it has plenty of cash flowing in to continue that practice. Cash flow more than covered the dividend, and Garmin ended the quarter with $3.5 billion in cash and marketable securities.

Even with today’s stock move, it’s not too late to buy Garmin stock. Based on its new guidance, shares are still trading at a price-to-earnings ratio (P/E) below 30 for this year. If management sees earnings continuing to increase in 2025, investors will likely continue to push Garmin shares higher over time.

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Howard Smith has positions in Garmin and has the following options: short November 2024 $200 calls on Garmin. The Motley Fool has positions in and recommends Garmin. The Motley Fool has a disclosure policy.