Garmin (NYSE: GRMN) took what was once a niche market in the GPS segment, and fused its solutions into multiple sectors, tackling both the business-to-consumer and business-to-business models. It might not be a hyper-growth disruptor, but is the market underestimating the company's potential?

What does Garmin do?

Garmin has five core segments; fitness, outdoors, marine, aviation, and auto. However, Garmin is, and always has been, a GPS company. Over time, it has adapted and built out diverse revenue streams in the form of fitness wearables, touch-screen monitors, surround-view (360 degrees) for boats, technology solutions for cockpits, and fleet management solutions.

The company has several notable partnerships with the likes of Spotify and Amazon for interconnected music optionality for its fitness devices, Embraer for flight deck systems, and Google for automotive voice assistants. 

Garmin's financials?

Garmin had just under $1.2 billion in sales in its most recent quarter, marking a 7% year-over-year (YoY) increase, although there was a slight drawdown in overall net margin to 23.7%.

The company showed positive revenue growth across all segments, particularly marine and aviation, which had 25% and 19% revenue growth, respectively. The auto segment saw 7% YoY revenue growth but the company is reporting a net loss for this area of its business, with a negative 17% operating margin.

Is Garmin a good investment opportunity?

Garmin has healthy margins, it's operating in growing sectors, and has partnerships with some of the largest companies in the world. It operates quite a sticky business model, especially in the marine and aviation segments -- with its tech built-in in many cases -- which gives the company pricing power.

However, it faces stiff competition in one of its main categories, fitness wearables. The Apple Watch has quickly is a clear competitor in smart devices, and the interconnected ecosystem Apple has created means customers could opt to go with the one company for all of their tech products.

A second concern is automotive. The infotainment industry is gaining a lot of traction, making for an increasingly competitive environment. Advanced chipmakers such as Nvidia and Micron are just a couple of examples entering the space that could enact predatory pricing models to squeeze the competition. In a segment where revenue growth is relatively slow for Garmin and profitability is an issue -- the environment could potentially worsen.

We've seen Garmin's resilience throughout its lifecycle -- tycoons in the form of Apple and Google intended to completely upend its business in the 2000s -- but the company has motored on. While I believe Garmin will be around for the years to come, it doesn't have clear monopolistic-like control or a competitive advantage that convinces me it will be a major leader in the future, which leads me to just add this one to the watchlist for the time being.