Buy or Sell Zebra Technologies Stock?

Zebra Technologies (ZBRA) stock has fallen 12% during the past day, and is currently trading at $274.31. We believe there is a near-equal mix of good and bad in ZBRA stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $14 Bil in market cap, Zebra Technologies provides enterprise asset intelligence solutions, including printers for labels and cards, plus maintenance, support, repair, and managed services in asset tracking and enterprise mobility.

[1] Valuation Looks Moderate

This table highlights how ZBRA is valued vs broader market. For more details see: ZBRA Valuation Ratios

[2] Growth Is Inconsistent

• Zebra Technologies has seen its top line shrink at an average rate of -2.4% over the last 3 years
• Its revenues have grown 13% from $4.7 Bil to $5.3 Bil in the last 12 months
• Also, its quarterly revenues grew 5.2% to $1.3 Bil in the most recent quarter from $1.3 Bil a year ago.

This table highlights how ZBRA is growing vs broader market. For more details see: ZBRA Revenue Comparison

[3] Profitability Appears Moderate

• ZBRA last 12 month operating income was $806 Mil representing operating margin of 15.3%
• With cash flow margin of 16.5%, it generated nearly $866 Mil in operating cash flow over this period
• For the same period, ZBRA generated nearly $512 Mil in net income, suggesting net margin of about 9.7%

This table highlights how ZBRA profitability vs broader market. For more details see: ZBRA Operating Income Comparison

[4] Financial Stability Looks Very Strong

• ZBRA Debt was $2.4 Bil at the end of the most recent quarter, while its current Market Cap is $14 Bil. This implies Debt-to-Equity Ratio of 17.0%
• ZBRA Cash (including cash equivalents) makes up $1.1 Bil of $8.1 Bil in total Assets. This yields a Cash-to-Assets Ratio of 13.1%

[5] Downturn Resilience Is Moderate

ZBRA saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• ZBRA stock fell 67.8% from a high of $614.55 on 10 December 2021 to $197.99 on 1 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $421.11 on 23 January 2025 , and currently trades at $274.31

 
2020 Covid Pandemic

• ZBRA stock fell 37.7% from a high of $259.14 on 2 January 2020 to $161.51 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 29 May 2020

 
2008 Global Financial Crisis

• ZBRA stock fell 61.1% from a high of $42.28 on 19 July 2007 to $16.45 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 10 May 2011

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ZBRA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.