Zebra Tech (ZBRA) AI Stock Analysis

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Zebra Tech

(NASDAQ:ZBRA)

70Outperform

Zebra Technologies exhibits strong financial performance with solid profitability and cash flow generation. The earnings call highlighted robust growth but noted potential tariff impacts. While technical indicators suggest mixed momentum, a high P/E ratio reflects optimistic market expectations. Overall, the company is well-positioned for growth, but external risks require careful monitoring.

Positive Factors

Earnings

Zebra reported first-quarter revenue and earnings above expectations, driven by growth in all product categories, end-markets, and geographies.

Guidance

Q1 results exceeded expectations, and investors largely cheered the better-than-feared outlook for Q2 and full-year 2025.

Innovation

Zebra Technologies is well positioned for innovations around AI and expanding RFID use cases due to its leadership and key partnerships.

Negative Factors

Market Uncertainty

Uncertainty related to tariffs and trade policy is widespread amongst Zebra’s customers and is causing the company to be more cautious regarding the outlook.

Tariffs

Management raised its expectation for the net tariff impact on gross profit to $70 million, signaling a substantial headwind.

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

$12.76B

Dividend YieldN/A

Average Volume (3M)719.64K

Price to Earnings (P/E)23.7

Beta (1Y)1.58

Revenue Growth16.72%

EPS Growth109.89%

CountryUS

Employees9,900

SectorTechnology

Sector Strength65

IndustryCommunication Equipment

Share Statistics

EPS (TTM)4.02

Shares Outstanding50,854,330

10 Day Avg. Volume694,825

30 Day Avg. Volume719,642

Financial Highlights & Ratios

PEG Ratio6.39

Price to Book (P/B)3.78

Price to Sales (P/S)0.00

P/FCF Ratio13.55

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue0.79

Enterprise Value/Gross Profit6.10

Enterprise Value/Ebitda4.65

Forecast

1Y Price Target

$310.00

Price Target Upside16.23% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering10

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 strong profitability with notable revenue growth and robust cash flow metrics. While the balance sheet is stable, moderate leverage and high debt levels warrant attention. Overall, the company maintains a solid financial profile with strong cash generation.

Income Statement

Positive

Zebra Tech demonstrates strong profitability with a TTM gross profit margin of 48.3% and a net profit margin of 10.7%. The company has shown robust revenue growth, increasing by 11.5% from the previous period. However, EBIT margin at 15.2% and EBITDA margin at 18.4% indicate room for improvement compared to industry peers.

Balance Sheet

Positive

The balance sheet reflects a healthy financial position with a debt-to-equity ratio of 0.64, indicating moderate leverage. Return on equity stands at 15.1%, showcasing efficient management of equity. The equity ratio is 45.9%, highlighting a solid base of equity financing. Overall, the company maintains a stable financial structure, although a high level of debt could pose risks in economic downturns.

Cash Flow

Positive

The cash flow statement is strong, with a free cash flow growth rate of 4.9% in the TTM period. The operating cash flow to net income ratio is 1.94, indicating strong cash generation relative to net income. Additionally, the free cash flow to net income ratio of 1.82 demonstrates effective conversion of earnings into cash. The company's cash flow metrics indicate robust liquidity and operational efficiency.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.11B	4.98B	4.58B	5.78B	5.63B	4.45B
	Gross Profit
2.46B	2.41B	2.12B	2.62B	2.63B	2.00B
	EBIT
777.00M	742.00M	481.00M	1.35B	979.00M	651.00M
	EBITDA
976.00M	936.00M	652.00M	1.14B	1.17B	736.00M
	Net Income Common Stockholders
549.00M	528.00M	296.00M	463.00M	837.00M	504.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
879.00M	901.00M	137.00M	105.00M	332.00M	168.00M
	Total Assets
7.90B	7.97B	7.31B	7.53B	6.21B	5.38B
	Total Debt
2.36B	2.36B	2.41B	2.16B	1.11B	1.37B
	Net Debt
1.48B	1.46B	2.28B	2.06B	780.00M	1.21B
	Total Liabilities
4.27B	4.38B	4.27B	4.80B	3.23B	3.23B
	Stockholders Equity
3.63B	3.59B	3.04B	2.73B	2.98B	2.14B
Cash Flow		Free Cash Flow
1.00B	954.00M	-91.00M	413.00M	1.01B	895.00M
	Operating Cash Flow
1.07B	1.01B	-4.00M	488.00M	1.07B	962.00M
	Investing Cash Flow
-128.00M	-57.00M	-92.00M	-968.00M	-546.00M	-641.00M
	Financing Cash Flow
-185.00M	-190.00M	117.00M	253.00M	-371.00M	-157.00M

Zebra Tech Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price266.71

Price Trends

50DMA

263.05

Positive

100DMA

320.05

Negative

200DMA

342.24

Negative

Market Momentum

MACD

0.18

Negative

RSI

58.29

Neutral

STOCH

85.83

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZBRA, the sentiment is Neutral. The current price of 266.71 is above the 20-day moving average (MA) of 242.86, above the 50-day MA of 263.05, and below the 200-day MA of 342.24, indicating a neutral trend. The MACD of 0.18 indicates Negative momentum. The RSI at 58.29 is Neutral, neither overbought nor oversold. The STOCH value of 85.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLEX	78 Outperform	$14.74B	17.07	18.45%	―	-12.94%	47.70%
PSTG	72 Outperform	$15.60B	155.54	8.29%	―	11.92%	74.08%
ZBRA	70 Outperform	$12.76B	23.71	16.16%	―	16.72%	109.89%
NTAP	70 Outperform	$19.29B	17.29	114.33%	2.23%	5.46%	23.49%
WDC	66 Neutral	$15.39B	8.38	28.45%	―	21.22%	―
JBL	64 Neutral	$16.13B	36.00	24.10%	0.21%	-14.45%	-64.32%
Sector *	60 Neutral	$10.96B	10.27	-6.73%	2.97%	7.73%	-11.60%

* Technology Sector Average

Performance Comparison

ZBRA

Zebra Tech

266.71

-49.29

-15.60%

FLEX

Flex

38.48

9.92

34.73%

JBL

Jabil

153.98

36.43

30.99%

NTAP

NetApp

93.45

-12.65

-11.92%

WDC

Western Digital

44.10

-9.53

-17.77%

PSTG

Pure Storage

48.70

-5.63

-10.36%

Zebra Tech Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 9.54%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

Zebra Technologies reported strong financial performance in Q1 2025, with significant revenue and earnings growth driven by broad-based demand across regions and strategic acquisitions. However, the positive results were tempered by challenges related to tariffs, which are impacting profitability and leading to cautious full-year guidance. While the company's operational execution remains strong, external factors such as tariffs and manufacturing sector challenges present near-term risks.

Q1-2025 Updates

Positive Updates

Strong Q1 Performance

Zebra Technologies reported sales exceeding $1.3 billion, a 12% increase compared to the prior year, with an adjusted EBITDA margin of 22.3%, a 240 basis point increase.

Record Non-GAAP Earnings

Non-GAAP diluted earnings per share were $4.02, which was 42% higher than the prior year.

Broad-Based Growth Across Regions

EMEA sales grew 18%, Asia Pacific sales increased 13%, and Latin America sales grew 18% with strength in Mexico.

Successful Strategic Acquisition

Zebra acquired FotoNeuf, a leading 3D machine vision company, for $62 million, expected to contribute approximately 30 basis points to overall sales growth in 2025.

Strong Free Cash Flow

Zebra generated $158 million of free cash flow in Q1, with expectations of at least $700 million for the year.

Negative Updates

Impact of Tariffs

Zebra is facing an $80 million to $90 million annualized gross profit impact due to tariffs, with a $25 million to $30 million impact expected in Q2.

Reduced Full-Year Margin Guidance

Adjusted EBITDA margin outlook for the full year was reduced by 100 basis points to between 20% and 21% due to increased direct costs of tariffs.

Challenging Manufacturing Sector

Manufacturing growth lagged other sectors, with high single-digit growth compared to double-digit growth in other verticals.

Flat Services and Software Revenue

Services and software revenue grew slightly, impacted by lower mobile computing volume in 2023.

Company Guidance

In the first quarter of fiscal year 2025, Zebra Technologies reported sales exceeding $1.3 billion, marking a 12% increase compared to the prior year. The company achieved an adjusted EBITDA margin of 22.3%, which is a 240 basis point improvement, and non-GAAP diluted earnings per share of $4.02, a 42% increase year-over-year. Sales growth was strong across major product categories and regions, with North America up 7%, EMEA up 18%, Asia Pacific up 13%, and Latin America up 18%. The asset intelligence and tracking segment saw an 18% increase in sales, while the enterprise visibility and mobility segment grew by 9%. Adjusted gross margin improved by 150 basis points to 49.6%, and free cash flow for the quarter was $158 million. The company anticipates a $70 million gross profit impact from tariffs for the full year, a $50 million increase from prior guidance, and maintains a full-year sales growth expectation of 3% to 7%, despite an increase in tariffs.

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.