Zebra Technologies Sees Impressive Stock Growth Amid Strong Earnings
Market Capitalization and Core Business Overview
With a market cap of $20.9 billion, Zebra Technologies Corporation (ZBRA) is a leader in the automatic identification and data capture (AIDC) industry. Based in Lincolnshire, Illinois, the company specializes in a variety of AIDC products, such as mobile computers, barcode scanners, specialty printers for barcode labeling, real-time location systems (RTLS), and associated software applications.
Over the past year, ZBRA’s shares have significantly outperformed the broader market, skyrocketing 75.3%. In comparison, the S&P 500 Index ($SPX) has only increased 31.8%. Furthermore, year-to-date (YTD), ZBRA is up nearly 48.5%, a marked difference compared to SPX’s 25.8% gains.
A closer look reveals an even stronger performance when ZBRA’s success is juxtaposed with the Technology Select Sector SPDR Fund’s (XLK) 25.6% gain over the same period and a 20.3% increase YTD.
Strong Earnings Propel Stock Higher
On October 29, ZBRA’s shares surged by 5.8% following a robust Q3 earnings release. The company’s adjusted earnings skyrocketed by 301.1% to $3.49 per share, far surpassing Wall Street’s expectations of $3.24. Additionally, revenue rose 31.3% year-over-year to $1.25 billion, outpacing consensus estimates of $1.21 billion.
Furthermore, ZBRA demonstrated efficiency with both its adjusted gross margin and EBITDA margin expanding by 430 and 980 basis points, respectively. Operating expenses also saw a decline of 3.9% year-over-year, amounting to $422 million, thanks to effective restructuring and strong growth in both of its business segments.
Future Projections and Analyst Ratings
Looking ahead, analysts project that ZBRA’s earnings per share (EPS) for the current fiscal year, which ends in December, will rise nearly 40.8% year-over-year to $12.40. ZBRA has consistently beaten earnings expectations, with positive surprises in each of the last four quarters.
Among 15 analysts covering the stock, the consensus rating stands at “Moderate Buy,” based on eight “Strong Buy,” one “Moderate Buy,” five “Hold,” and one “Strong Sell” ratings.
Investor Insights and Price Targets
On October 31, Barclays reaffirmed an “Equal-Weight” rating on ZBRA while raising its price target to $407, suggesting minor upside from current levels. The mean price target of $412.08 indicates a modest 1.6% upside, while the highest Street price target of $451 suggests a potential 11.1% increase.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
