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Here's Why Investing in Zebra Technologies (ZBRA) Makes Sense
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Zebra Technologies Corporation (ZBRA - Free Report) is gaining from strength in the Asset Intelligence and Tracking segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this current Zacks Rank #1 (Strong Buy) company a smart investment choice at the moment.
Business Strength: Zebra Technologies is benefiting from growth across services, software and radio frequency identification (RFID) products. Improving supply chains and lower product lead times will benefit the company’s growth. Pricing actions and strong sales of RFID products are aiding the Asset Intelligence and Tracking segment. Higher sales of services and software and contributions from recent acquisitions bode well for the Enterprise Visibility & Mobility segment.
Expansion Efforts: The company has solidified its product portfolio and leveraged business opportunities by adding assets. In this regard, the company’s acquisition of Matrox Imaging (June 2022) enabled it to combine its fixed industrial scanning and machine vision portfolio with the latter’s expertise in the imaging market. Its acquisition of antuit.ai (October 2021) complemented the planning and demand forecasting module for its retail software portfolio. Its Fetch Robotics buyout (August 2021) strengthened its capability to offer a comprehensive line of advanced robotics solutions to customers.
Cost-Management Actions: Zebra Technologies remains focused on cost-management actions. The company has announced expanded cost-reduction actions, including an incremental $65 million of annualized expense reductions, as it grapples with a slowdown in end markets and demand softness. Along with the previous cost-reduction actions taken over the past year, the company expects to generate approximately $120 million in cost savings annually.
Rewards to Shareholders: Zebra Technologies’ measures to continue rewarding its shareholders despite the slowdown in markets hold promise. In 2023, the company repurchased shares worth $52 million. While free cash flow was negative in 2023, the company expects the same to be at least $550 million in 2024. This should support the company’s shareholder-friendly policies.
Northward Estimate Revision: The Zacks Consensus Estimate for ZBRA’s 2024 earnings has been revised 3.8% upward in the past 60 days.
Price Performance: Shares of Zebra Technologies have gained 34.1% in the past six months, outperforming the industry’s 25.6% increase.
Image Source: Zacks Investment Research
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Illinois Tool Works Inc. (ITW - Free Report) presently carries a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 3.3%, on average.
ITW’s earnings estimates have remained steady for 2024 in the past 60 days. Shares of Illinois Tool have risen 11.4% in the past six months.
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 12%.
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Here's Why Investing in Zebra Technologies (ZBRA) Makes Sense
Zebra Technologies Corporation (ZBRA - Free Report) is gaining from strength in the Asset Intelligence and Tracking segment, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this current Zacks Rank #1 (Strong Buy) company a smart investment choice at the moment.
Business Strength: Zebra Technologies is benefiting from growth across services, software and radio frequency identification (RFID) products. Improving supply chains and lower product lead times will benefit the company’s growth. Pricing actions and strong sales of RFID products are aiding the Asset Intelligence and Tracking segment. Higher sales of services and software and contributions from recent acquisitions bode well for the Enterprise Visibility & Mobility segment.
Expansion Efforts: The company has solidified its product portfolio and leveraged business opportunities by adding assets. In this regard, the company’s acquisition of Matrox Imaging (June 2022) enabled it to combine its fixed industrial scanning and machine vision portfolio with the latter’s expertise in the imaging market. Its acquisition of antuit.ai (October 2021) complemented the planning and demand forecasting module for its retail software portfolio. Its Fetch Robotics buyout (August 2021) strengthened its capability to offer a comprehensive line of advanced robotics solutions to customers.
Cost-Management Actions: Zebra Technologies remains focused on cost-management actions. The company has announced expanded cost-reduction actions, including an incremental $65 million of annualized expense reductions, as it grapples with a slowdown in end markets and demand softness. Along with the previous cost-reduction actions taken over the past year, the company expects to generate approximately $120 million in cost savings annually.
Rewards to Shareholders: Zebra Technologies’ measures to continue rewarding its shareholders despite the slowdown in markets hold promise. In 2023, the company repurchased shares worth $52 million. While free cash flow was negative in 2023, the company expects the same to be at least $550 million in 2024. This should support the company’s shareholder-friendly policies.
Northward Estimate Revision: The Zacks Consensus Estimate for ZBRA’s 2024 earnings has been revised 3.8% upward in the past 60 days.
Price Performance: Shares of Zebra Technologies have gained 34.1% in the past six months, outperforming the industry’s 25.6% increase.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter average earnings surprise of 10.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1% in the past 60 days. The stock has gained 17.6% in the past six months.
Illinois Tool Works Inc. (ITW - Free Report) presently carries a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 3.3%, on average.
ITW’s earnings estimates have remained steady for 2024 in the past 60 days. Shares of Illinois Tool have risen 11.4% in the past six months.
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 12%.
The Zacks Consensus Estimate for AOS’ 2024 earnings increased 1.2% in the past 60 days. Shares of A. O. Smith have soared 24.7% in the past six months.