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Zebra's (ZBRA) antuit.ai Buyout to Boost Retail Software Portfolio

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Zebra Technologies Corporation (ZBRA - Free Report) recently announced plans to acquire antuit.ai, a provider of artificial intelligence (AI)-driven Software-as-a-Service (SaaS) solutions.

Zebra’s shares declined 0.5% yesterday to eventually close the trading session at $584.78.

Dallas, TX-based antuit.ai belongs to a consortium headed by Goldman Sachs Asset Management. The company’s SaaS-based solution, powered by AI, is utilized across retail and consumer packaged goods industries for making important business decisions. Its solutions facilitate consumer product companies in demand forecasting, optimizing procedures related to inventory allocation and order delivery as well as formulating prices and promotion.

Inside the Headlines

The acquisition will augment Zebra’s Enterprise Asset Intelligence offerings, which empower users with operational visibility and provide important business, market and customer insights. Zebra will leverage antuit.ai’s expertise in the demand forecasting space and combine it with its SaaS portfolio to offer an advanced analytics, AI and automation solution to its customers. This will aid them in effective planning and executing business operations with better insights into the supply chain, thus improving their margins and profitability.

The buyout will complement the planning and demand forecasting module for Zebra’s retail software portfolio that includes the likes of Workforce Connect and SmartCount solutions. As noted, this buyout, along with Zebra’s launch of fixed industrial scanning and machine vision portfolio, will allow it to further expand into the consumer products industries.

The buyout is expected to be completed this year, subject to certain regulatory approvals. The transaction, which is predicted to have no material impact on Zebra’s earnings in 2021, is likely to be funded through cash.

Other Inorganic Moves

In August 2021, Zebra completed the acquisition of Fetch Robotics, Inc. for $290 million. The buyout is likely to strengthen its position as a provider of comprehensive line of advanced robotics solutions.

In September 2020, Zebra acquired Reflexis Systems, Inc, which has been augmenting its software offerings across retail and other key markets. The acquisitions contributed 1.6% to the company’s net sales in the second quarter of 2021.

Zacks Rank, Price Performance and Estimate Revisions

Zebra, with approximately $31.2 billion market capitalization, currently carries a Zacks Rank #2 (Buy). The company is likely to benefit from the robust demand for its products and solutions and acquired assets in the quarters ahead. Also, strong cash flows allow the company to effectively support its capital-allocation strategies.

In the past three months, the company’s share price has increased 16.3% compared with the industry’s growth of 12.3%.

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.

Other Stocks to Consider

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

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

John Bean Technologies pulled off an earnings surprise of 16.85%, on average, in the trailing four quarters.

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

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