William Blair analyst Brian Drab has maintained their neutral stance on ZBRA stock, giving a Hold rating today.
Brian Drab has given his Hold rating due to a combination of factors impacting Zebra Technologies. Despite the company reporting a strong start to 2025 with first-quarter revenue and earnings surpassing expectations, there are significant concerns regarding tariff impacts. The company’s revenue grew by 12% organically, driven by robust demand across various markets, and adjusted EPS exceeded both consensus and management’s guidance. However, the looming tariff headwinds present a challenge.
Management has raised its expectations for the net tariff impact on gross profit to $70 million, a substantial increase from the previous estimate. This is primarily due to increased tariffs on exports from China and other Asian countries. Although Zebra is implementing mitigation strategies, such as shifting production and adjusting pricing, the uncertainty surrounding trade policies has led to a cautious outlook. These factors contribute to the Hold rating, as the positive performance is tempered by external risks that could affect future profitability.