Zebra Technologies Corporation ( ZBRA Quick Quote ZBRA - Free Report) has been benefiting from strong demand for printing and supplies, enterprise mobile computing, intelligent automation solutions, as well as services and software across all regions. The company’s investment in growth initiatives, along with a focus on supply-chain optimization and cost management actions, is likely to drive its performance. For 2021, it anticipates its net sales to grow more than 25% year over year, higher than 23-25% predicted earlier. The company’s acquisition of antuit.ai (October 2021) is expected to enhance the planning and demand forecasting module for its retail software portfolio. Its Fetch Robotics, Inc. buyout (August 2021) will likely strengthen its capability to offer a comprehensive line of advanced robotics solutions to customers. Its acquisition of Reflexis Systems, Inc. (September 2020) has also strengthened its software offerings across retail and other key markets. In the second and third quarters of 2021, buyouts contributed 1.6% and 1.3% to its net sales, respectively. Its ability to generate healthy cash flow adds to its strength. In the first nine months of 2021, it generated free cash flow of $798 million, up 65.6% year over year. For 2021, it expects free cash flow to be at least $950 million. In the first nine months of 2021, it used $25 million for share buybacks. However, Zebra has been dealing with high cost of sales and operating expenses. In the third quarter, its cost of sales recorded an increase of 23.6% on a year-over-year basis, while operating expenses jumped 19.2%. Challenges related to the supply chain and higher freight costs might affect its near-term performance. Risks related to the company’s international exposure might also affect its performance. Image Source: Zacks Investment Research
In the past three months, this Zacks Rank #3 (Hold) stock has returned 0.8% compared with the
industry’s growth of 0.1%. Key Picks
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