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Zebra (ZBRA) Acquires Fetch Robotics, Boosts Product Offerings

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Zebra Technologies Corporation (ZBRA - Free Report) recently announced that it has completed the acquisition of Fetch Robotics, Inc. for $290 million. Zebra previously owned 5% of Fetch Robotics and the latest transaction is related to the takeover of the remaining 95% of the company.

Zebra’s shares jumped 0.6% yesterday to eventually close the trading session at $567.11.

Based in San Jose, CA Fetch Robotics provides autonomous mobile robots and cloud-based enterprise software for integrating wide-ranging automated workflows into warehouse and manufacturing operations. The company’s Fetch Cloud Robotics Platform offers automation solutions for inventory management and material handling in a facility.

Acquisition Rationale

With the acquisition, Zebra will be able to enhance its Enterprise Asset Intelligence offerings, which empower users with operational visibility and provide important business, market and customer insights. The buyout will enable Zebra to leverage Fetch Robotics’ expertise in intelligent industrial automation space and combine it with its workflow solutions including FulfillmentEdge and SmartSight. This will likely strengthen Zebra’s position in the manufacturing and distribution markets.

The addition of Fetch Robotics will boost the company’s competency to provide a comprehensive line of advanced robotics solutions to its customers.

Other Notable Buyouts

Zebra acquired Reflexis Systems, Inc. in September 2020, which 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. In the first and second quarters of 2021, acquired assets contributed 1.4% and 1.6% to the company’s net sales, respectively.

Zacks Rank, Price Performance and Estimate Revisions

Zebra, with approximately $30.3 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from robust demand for its products and solutions, acquired assets and strong cash flows in the quarters ahead. However, it has been dealing with the adverse impacts of high cost of sales and operating expenses over time.

In the past six months, the company’s share price has increased 18.7% compared with the industry’s growth of 23.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Zebra’s earnings is pegged at $17.43 for 2021, up 2.9% from the 30-day-ago figure. The consensus estimate for 2022 earnings is pegged at $18.43, up 0.4% over the same time frame.

Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are Kadant Inc. (KAI - Free Report) , Dover Corporation (DOV - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . While Kadant sports a Zacks Rank #1 (Strong Buy), Dover and EnPro carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kadant delivered an earnings surprise of 22.26%, on average, in the trailing four quarters.

Dover delivered an earnings surprise of 17.59%, on average, in the trailing four quarters.

EnPro delivered an earnings surprise of 80.64%, on average, in the trailing four quarters.

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