Zebra Technologies Stock Delivers Strong Cash Yield – Upside Ahead?

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 stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also below its 3-year average.

Here is what’s going well for the company. Zebra Technologies reported Q4 2025 sales up 10.6% to $1.48 billion, driven by organic growth and recent acquisitions like Elo Touch and Photoneo, expanding its self-service and 3D machine vision offerings. The company entered 2026 with a healthy backlog and pipeline, focusing on AI-powered solutions and RFID in retail and logistics, supporting a 2026 sales growth forecast of 9-13%. New AI-native mobile computers enhance productivity. An additional $1 billion share repurchase program underscores confidence.

ZBRA Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 7.0%, but Zebra Technologies stock does
• Strong Margin: Last 12 month operating margin of 14.8%
• Growth: Last 12 revenue growth of 8.3% – low growth, but this selection is all about high yield and margin
• Valuation: ZBRA stock currently trading at 44% below 2Y high, 14% 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. Broadridge Financial Solutions (BR)
2. Gen Digital (GEN)
3. HealthEquity (HQY)

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

Portfolios Win When Stock Picks Fall Short

Individual stocks can soar or tank but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside and mitigate the downside associated with any individual stock.

Why settle for average market returns? The Trefis High Quality (HQ) Portfolio invests in a diverse group of 30 stocks that have collectively delivered stronger upside with reduced volatility compared to the broader indices. Discover the methodology behind these smoother, higher returns by checking the HQ Portfolio performance data.