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Here's Why it is Worth Investing in Zebra (ZBRA) Stock Now

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Zebra Technologies Corporation (ZBRA - Free Report) currently boasts robust prospects on strong demand environment for its products, focus on product developments, acquired assets and healthy cash flow.

Notably, the Zacks Rank #2 (Buy) company has a market capitalization of $28.7 billion. In the past six months, it has gained 39.5% compared with the industry’s growth of 32.5%.

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Let’s delve into the factors that make investment in the company a smart choice at the moment.

Solid Demand Environment: Zebra is poised to benefit from robust demand for printing and supplies, enterprise mobile computing, RFID product lines, as well as services and software in the quarters ahead. Also, the growing popularity of the company’s Enterprise Asset Intelligence solutions, supported by its focus on investing in product developments, will likely be beneficial. For the second quarter of 2021, it anticipates adjusted net sales to grow 38-42% on a year-over-year basis.

Acquisition Benefits:  The company intends to strengthen and expand its businesses through acquisitions. For instance, its acquisition of Reflexis Systems, Inc. (September 2020) has been augmenting its software offerings across retail and other key markets. Also, it completed the buyouts of Cortexica Vision Systems Ltd., Profitect Inc. and Temptime Corporation in 2019. Notably, in the first quarter of 2021, the buyouts contributed 1.4% to the company’s net sales.

Healthy Cash Flow: Strong cash flow allows Zebra to invest in organic growth, execute acquisitions and repurchase shares. Although it refrained from repurchasing shares in first-quarter 2021, it used $200 million for share buybacks in 2020. Exiting the first quarter, $753 million worth of shares under the company’s buyback program was left for repurchase. Also, in the first quarter, it made debt repayments of $156 million. For 2021, it anticipates free cash flow to be at least $850 million, higher than a minimum of $700 million projected earlier.

Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for Zebra’s 2021 earnings has trended up from $15.60 to $17.08 on four upward estimate revisions against none downward. In addition, the consensus estimate for 2022 earnings increased from $17.10 to $18.36 on five upward estimate revisions against none downward.

Other Stocks to Consider

Some other top-ranked stocks from the Zacks Industrial Products sector are Energy Recovery, Inc. (ERII - Free Report) , Fuel Tech, Inc. (FTEK - Free Report) and Sharps Compliance Corp. (SMED - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Energy Recovery delivered a trailing-four quarter earnings surprise of 257.08%, on average.

Fuel Tech delivered an earnings surprise of 82.92%, on average, in the trailing four quarters.

Sharps Compliance delivered an earnings surprise of 306.67%, on average, in the trailing four quarters.

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