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Zebra Tech (ZBRA)
NASDAQ:ZBRA
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Zebra Tech
(NASDAQ:ZBRA)
65Neutral
Positive Factors
Earnings
Q4 revenue increased 32% year over year, benefiting from easy comps and ahead of Street expectations.
Innovation
Zebra Technologies is well positioned for innovations around AI and expanding RFID use cases due to its leadership and key partnerships.
Market Trends
ZBRA is seen as a beneficiary of longer-term automation and digitization adoption trends, supporting organic sales growth and earnings per share growth.
Negative Factors
Consumer Sentiment
Mixed consumer sentiment and tight capital expenditure budgets, along with the discretionary nature of automation spending, dampen enthusiasm for ZBRA.
Financial Performance
ZBRA’s full-year outlook fell short of Street expectations, owing in large part to headwinds from import tariffs and broader uncertainty in the markets.
Valuation
The current trading valuation of Zebra Technologies is considered high, with recovery largely built into the price.
Zebra Tech (ZBRA) vs. S&P 500 (SPY)
Market Cap
$11.85B
Dividend YieldN/A
Average Volume (3M)719.43K
Price to Earnings (P/E)22.8
Beta (1Y)1.58
Revenue Growth8.07%
EPS Growth78.02%
CountryUS
Employees9,900
SectorTechnology
Sector Strength51
IndustryCommunication Equipment
Share Statistics
EPS (TTM)10.17
Shares Outstanding51,143,320
10 Day Avg. Volume1,003,716
30 Day Avg. Volume719,430
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)N/A
Price to Sales (P/S)2.99
Price to Cash Flow (P/CF)12.20
P/FCF Ratio12.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$335.88Price Target Upside47.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Zebra Tech Business Overview & Revenue Model
Company DescriptionZebra Technologies Corporation, together with its subsidiaries, provides enterprise asset intelligence solutions in the automatic identification and data capture solutions industry worldwide. It operates in two segments, Asset Intelligence & Tracking and Enterprise Visibility & Mobility. The company designs, manufactures, and sells printers, which produce labels, wristbands, tickets, receipts, and plastic cards; dye-sublimination thermal card printers, which produce images which are used for personal identification, access control, and financial transactions; RFID printers that encode data into passive RFID transponders; accessories and options for our printers, including vehicle mounts and battery chargers; stock and customized thermal labels, receipts, ribbons, plastic cards, and RFID tags for printers; and temperature-monitoring labels primarily used in vaccine distribution. It also provides various maintenance, technical support, repair, and managed and professional services; real-time location systems and services; and tags, sensors, exciters, middleware software, and application software; as well as physical inventory management solutions, and rugged tablets and enterprise-grade mobile computing products and accessories. In addition, the company offers barcode scanners, image capture devices, and RFID readers; and workforce management solutions, workflow execution and task management solutions, and prescriptive analytics solutions, as well as communications and collaboration solutions. It also provides services, including maintenance, technical support, repair, managed and professional services; as well as cloud-based software subscriptions and robotics automation solutions. The company serves retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries through direct sales force, and network of channel partners. The company was founded in 1969 and is headquartered in Lincolnshire, Illinois.
How the Company Makes MoneyZebra Technologies makes money primarily through the sale of its hardware products, such as barcode scanners, mobile computers, and printers, which are integral to supply chain management and asset tracking. The company also generates revenue from its software solutions and services, including analytics platforms that provide insights into business operations. In addition, Zebra has established significant partnerships with large enterprises across various industries, which enhance its market reach and adoption of its technology solutions. A growing portion of its revenue comes from recurring sources, such as software subscriptions, maintenance, and support services, which provide a steady income stream and strengthen customer relationships.
Zebra Tech Financial Statement Overview
Summary
Zebra Tech demonstrates solid financial health across its income statement, balance sheet, and cash flow statement. The company shows strong profitability and efficiency in its operations, as evidenced by improving margins and revenue growth. The balance sheet is stable with manageable debt levels, and the cash flow statement reflects strong cash generation and conversion. Overall, Zebra Tech is well-positioned for sustainable growth with a balanced financial strategy.Income Statement
Zebra Tech shows strong gross profit margins, consistently over 40%, indicating effective cost management and pricing strategies. The net profit margin has improved significantly from the previous year, rising to 10.6% in 2024 from 6.5% in 2023, showcasing improved profitability. The revenue growth rate from 2023 to 2024 is 8.67%, which is a healthy sign of business expansion, albeit slower than previous years. EBIT and EBITDA margins have also improved, indicating better operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.65 in 2024, showing moderate leverage. Return on Equity (ROE) improved to 14.7% in 2024, indicating efficient utilization of equity. However, the equity ratio stands at 45.0%, suggesting a balanced but not overly conservative capital structure. Overall, the company maintains a stable balance sheet with manageable debt levels.70
Positive
Cash Flow
Zebra Tech's cash flow performance is robust, with a significant turnaround in free cash flow from negative in 2023 to positive in 2024, highlighting improved cash generation capabilities. The operating cash flow to net income ratio of 1.92 in 2024 indicates strong cash conversion efficiency. The company's free cash flow to net income ratio of 1.81 suggests effective cash management and the ability to fund operations and growth.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.98B | 4.58B | 5.78B | 5.63B | 4.45B |
| Gross Profit | ||||
| 2.41B | 2.12B | 2.62B | 2.63B | 2.00B |
| EBIT | ||||
| 742.00M | 481.00M | 1.35B | 979.00M | 651.00M |
| EBITDA | ||||
| 937.00M | 652.00M | 1.14B | 1.17B | 736.00M |
| Net Income Common Stockholders | ||||
| 528.00M | 296.00M | 463.00M | 837.00M | 504.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 901.00M | 137.00M | 105.00M | 332.00M | 168.00M |
| Total Assets | ||||
| 7.97B | 7.31B | 7.53B | 6.21B | 5.38B |
| Total Debt | ||||
| 2.33B | 2.41B | 2.16B | 1.11B | 1.37B |
| Net Debt | ||||
| 1.43B | 2.28B | 2.06B | 780.00M | 1.21B |
| Total Liabilities | ||||
| 4.38B | 4.27B | 4.80B | 3.23B | 3.23B |
| Stockholders Equity | ||||
| 3.59B | 3.04B | 2.73B | 2.98B | 2.14B |
| Cash Flow | Free Cash Flow | |||
| 954.00M | -91.00M | 413.00M | 1.01B | 895.00M |
| Operating Cash Flow | ||||
| 1.01B | -4.00M | 488.00M | 1.07B | 962.00M |
| Investing Cash Flow | ||||
| -57.00M | -92.00M | -968.00M | -546.00M | -641.00M |
| Financing Cash Flow | ||||
| -190.00M | 117.00M | 253.00M | -371.00M | -157.00M |
Zebra Tech Technical Analysis
Negative
228.11
Price Trends
294.76
Negative
346.73
Negative
348.62
Negative
Market Momentum
-21.21
Positive
34.89
Neutral
29.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZBRA, the sentiment is Negative. The current price of 228.11 is below the 20-day moving average (MA) of 260.39, below the 50-day MA of 294.76, and below the 200-day MA of 348.62, indicating a bearish trend. The MACD of -21.21 indicates Positive momentum. The RSI at 34.89 is Neutral, neither overbought nor oversold. The STOCH value of 29.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZBRA.
Zebra Tech Risk Analysis
Zebra Tech disclosed 40 risk factors in its most recent earnings report. Zebra Tech reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zebra Tech Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.74B | 12.70 | 18.45% | ― | -12.94% | 47.70% | |
68 Neutral | $17.19B | 15.41 | 114.33% | 2.47% | 5.46% | 23.49% | |
65 Neutral | $11.85B | 22.78 | 15.95% | ― | 8.07% | 78.02% | |
64 Neutral | $12.46B | 8.55 | 13.99% | ― | 38.59% | ― | |
63 Neutral | $14.37B | 32.08 | 24.10% | 0.24% | -14.45% | -64.32% | |
60 Neutral | $13.45B | 137.14 | 8.29% | ― | 11.92% | 74.08% | |
58 Neutral | $11.04B | 9.83 | -6.56% | 3.16% | 7.59% | -10.43% |
* Technology Sector Average
Performance Comparison
ZBRA
Zebra Tech
228.11
-48.03
-17.39%
FLEX
Flex
31.37
3.29
11.72%
JBL
Jabil
135.51
6.19
4.79%
NTAP
NetApp
82.18
-16.82
-16.99%
WDC
Western Digital
35.93
-17.09
-32.23%
PSTG
Pure Storage
41.95
-10.37
-19.82%
Zebra Tech Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -35.36% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced sentiment, with strong performance in the fourth quarter and strategic acquisitions and innovations, but tempered by challenges in the manufacturing sector, tariff impacts, and an uncertain outlook for 2025.Highlights
Strong Fourth Quarter Performance
Zebra Technologies delivered results above their outlook with sales exceeding $1.3 billion, a 32% increase compared to the prior year. Adjusted EBITDA margin reached 22.1%, a nearly 7% increase, and non-GAAP diluted earnings per share doubled to $4.
Record Free Cash Flow
For the full year, Zebra generated $954 million of free cash flow with a 136% free cash flow conversion rate and ended the year with a 1.2x net debt to adjusted EBITDA leverage ratio.
Geographic Sales Growth
Sales grew 36% in North America, 24% in EMEA, 30% in Asia-Pacific, and 40% in Latin America, with particularly strong performance in Brazil.
Acquisition of Photoneo
Zebra agreed to purchase Photoneo, a leading 3D machine vision company, for approximately EUR 60 million, expanding their capabilities in automotive manufacturing, logistics, and other key markets.
Innovative AI Solutions
Zebra launched AI-based machine vision offerings and demonstrated AI-powered modern store solutions at the National Retail Federation trade show, showcasing their commitment to innovation in retail technology.
Lowlights
Manufacturing Sector Lagging
Despite overall sales growth, the manufacturing sector lagged behind other end markets, creating a challenge for future growth.
Tariffs Impacting Profit
Incremental tariffs from China and Mexico are expected to impact gross profit by approximately $20 million in 2025, peaking in Q2, with a total unmitigated impact potentially exceeding $60 million annually.
Uncertain 2025 Outlook
Zebra's visibility beyond Q1 is lower than usual due to an uncertain environment, including dynamic global trade, geopolitical, and macroeconomic factors, with cautious sales growth guidance of 3% to 7% for the year.
Impact of Strong U.S. Dollar
The strong U.S. dollar has created a headwind for sales growth, affecting the company's international competitiveness and customer plans.
Company Guidance
During the call, Zebra Technologies provided several key metrics highlighting their strong performance in the fourth quarter of 2024 and their cautious outlook for 2025. The company reported a 32% year-over-year increase in sales, achieving over $1.3 billion, and an adjusted EBITDA margin of 22.1%, reflecting a 7% improvement. Non-GAAP diluted earnings per share more than doubled to $4. For the full year, Zebra generated $954 million in free cash flow, achieving a 136% free cash flow conversion rate. Looking forward, the company anticipates first-quarter sales growth of 8% to 11%, with adjusted EBITDA margin expected around 21%. For the full year 2025, Zebra projects sales growth between 3% and 7%, an adjusted EBITDA margin of 21% to 22%, and non-GAAP diluted earnings per share ranging from $14.75 to $15.25. Despite solid backlog and demand trends, the outlook remains cautious due to geopolitical and macroeconomic uncertainties, including new tariffs that are expected to impact gross profit by approximately $20 million in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.