Could Cash Machine Zebra Technologies Stock Be Your Next Buy?

Zebra Technologies (ZBRA) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With ZBRA

ZBRA may be down 0% so far this year but is now trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Q3 2025 saw 4.8% organic sales growth, with Asset Intelligence & Tracking (AIT) segment revenue up 10.6% driven by RFID adoption. The Elo Touch Solutions acquisition, expected to expand the self-service market, helps drive projected Q4 sales growth of 8-11%. Initial AI-related revenues are anticipated in 2026, following active customer pilots. Further, supply chain diversification and a planned $500M stock repurchase underscore robust fundamentals.

ZBRA Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.4%, but Zebra Technologies stock does
• Strong Margin: Last 12 month operating margin of 15.3%
• Growth: Last 12 revenue growth of 12.9% – low growth, but this selection is all about high yield and margin
• Valuation: ZBRA stock currently trading at 42% below 2Y high, 11% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of ZBRA fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While ZBRA stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Zebra Technologies fell 51% in the Dot-Com Bubble and plunged 61% during the Global Financial Crisis. The 2018 correction and Covid sell-off weren’t gentle either, with declines near 29% and 38%. The inflation shock hit hardest, dragging the stock down almost 68%. Solid fundamentals matter, but when turmoil hits, Zebra’s volatility shows even strong stocks can face steep drops. 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.

For more details and our view, see Buy or Sell ZBRA Stock.

Stocks Like ZBRA

Not ready to act on ZBRA? Consider these alternatives:

1. GLOBALFOUNDRIES (GFS)
2. Vail Resorts (MTN)
3. Qualys (QLYS)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Move Beyond Single Stocks With A Multi Asset Portfolio

Markets move differently but a mix of assets smooths volatility. A multi asset portfolio keeps you invested and reduces the impact of sharp drops in any single area.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices