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Key Reasons to Hold on to Zebra Technologies (ZBRA) for Now

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Zebra Technologies (ZBRA - Free Report) is benefiting from growth across data capture solutions, printing and rugged tablets. Growth in printing owing to continued improvement in product availability is aiding the Asset Intelligence and Tracking segment. Sales from the segment increased 4.8% year over year in 2022.

Among the regions, North American sales are buoyed by strength in data capture and printing, as well as improved supply chains. Growth in Japan and China is boosting Asia-Pacific sales. While ZBRA has been witnessing weaker sales in the Europe, Middle East and Africa (“EMEA”) region (sales declined 7% in the fourth quarter of 2022 due to the suspension of sales into Russia in March 2022, as well as lower sales to large customers in Northern Europe), it is generating robust sales in the Latin American region due to growth in Brazil and Mexico. The company should benefit from a healthy pipeline of orders in 2023.

A soft demand environment and elongated sales cycles are concerns for this Zacks Rank #3 (Hold) company in the near term. However, improved supply chains and a reduction in premium supply chain costs should aid Zebra Technologies performance in 2023.

Zebra Technologies aims to strengthen its business through acquisitions. In June 2022, the company acquired Matrox Imaging, which enabled it to combine its fixed industrial scanning and machine vision portfolio with Matrox’s expertise in the imaging market. In 2021, the company acquired, Fetch Robotics and Adaptive Vision.

The buyout has strengthened Zebra Technologies’ position in the consumer products industry, while the Fetch Robotics acquisition has bolstered the company’s capability to offer a comprehensive line of advanced robotics solutions to customers.

The Adaptive Vision acquisition helped ZBRA enter the fixed industrial scanning and machine vision end markets and boosted its fixed industrial scanning and machine vision solution offerings. In the fourth quarter, acquisitions contributed 1.9% to the top line. The company expects a 150-basis point improvement from acquired assets in the first quarter. For the full year, the company expects a 0.5 percentage-point positive impact from acquired assets.

With improved supply chains and strength in the Asset Intelligence unit, shares of Zebra Technologies have gained around 19% in the past three months.

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Deere & Company (DE - Free Report) currently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 4.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

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Ingersoll Rand has an estimated earnings growth rate of approximately 3% for the current year. The stock has rallied 15.3% in the past six months.

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