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Zebra (ZBRA) Up 2.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Zebra Technologies (ZBRA - Free Report) . Shares have added about 2.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zebra due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Zebra Technologies reported first-quarter 2024 adjusted earnings of $2.84 per share. The bottom line slumped 27.9% year over year.
Total revenues of $1.2 billion surpassed the Zacks Consensus Estimate of $1.1 billion. The top line plunged 16.4% year over year due to softness across end markets. Consolidated organic net sales declined 16.8% year over year. Foreign currency translation had an adverse impact of 0.4% on sales.
Segmental Performance
Revenues from the Asset Intelligence & Tracking (AIT) segment declined 24.9% year over year to $392 million. The Zacks Consensus Estimate was pegged at $378 million. Organic net sales decreased 25.3% in the AIT segment. Foreign-currency translation hurt segmental revenues by 0.4%.
The Enterprise Visibility & Mobility segment’s revenues were $783 million, down 11.3% year over year. The consensus estimate was pegged at $768 million. Organic net sales declined 11.8%. Foreign-currency translation had an adverse impact of 0.5%.
Margin Profile
In first-quarter 2024, Zebra Technologies’ cost of sales totaled $612 million, down 17.1% year over year. Total operating expenses decreased 8.6% year over year to $404 million.
ZBRA reported a net income of $115 million in the first quarter compared with $150 million in the year-ago period.
Balance Sheet and Cash Flow
Exiting the first quarter, Zebra Technologies had cash and cash equivalents of $127 million compared with $137 million at the end of December 2023. Long-term debt was $1.8 billion compared with $2 billion at the end of December 2023.
In the first three months of 2024, Zebra Technologies generated net cash of $125 million in operating activities against $76 million cash used at the end of the year-ago period. In the same period, the company incurred a capital expenditure of $14 million. Free cash inflow was $111 million in the quarter against free cash outflow of $92 million in the year-ago period.
Guidance
For the second quarter of 2024, Zebra Technologies expects net sales to decline 1-5% year over year. Adjusted EBITDA margin is anticipated to be slightly above 19% for the quarter. Adjusted earnings per share are expected to be $2.60-$2.90.
For 2024, the company expects net sales to increase 1-5% compared with 2023. Adjusted earnings per share are anticipated to be $11.25-$12.25. The effective tax rate is expected to be approximately 17%. The adjusted EBITDA margin is anticipated to be almost 20%. ZBRA expects free cash flow to be at least $600 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.78% due to these changes.
VGM Scores
Currently, Zebra has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Zebra has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Zebra (ZBRA) Up 2.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Zebra Technologies (ZBRA - Free Report) . Shares have added about 2.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zebra due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Zebra Technologies Q1 Earnings & Revenues Decline Y/Y
Zebra Technologies reported first-quarter 2024 adjusted earnings of $2.84 per share. The bottom line slumped 27.9% year over year.
Total revenues of $1.2 billion surpassed the Zacks Consensus Estimate of $1.1 billion. The top line plunged 16.4% year over year due to softness across end markets. Consolidated organic net sales declined 16.8% year over year. Foreign currency translation had an adverse impact of 0.4% on sales.
Segmental Performance
Revenues from the Asset Intelligence & Tracking (AIT) segment declined 24.9% year over year to $392 million. The Zacks Consensus Estimate was pegged at $378 million. Organic net sales decreased 25.3% in the AIT segment. Foreign-currency translation hurt segmental revenues by 0.4%.
The Enterprise Visibility & Mobility segment’s revenues were $783 million, down 11.3% year over year. The consensus estimate was pegged at $768 million. Organic net sales declined 11.8%. Foreign-currency translation had an adverse impact of 0.5%.
Margin Profile
In first-quarter 2024, Zebra Technologies’ cost of sales totaled $612 million, down 17.1% year over year. Total operating expenses decreased 8.6% year over year to $404 million.
ZBRA reported a net income of $115 million in the first quarter compared with $150 million in the year-ago period.
Balance Sheet and Cash Flow
Exiting the first quarter, Zebra Technologies had cash and cash equivalents of $127 million compared with $137 million at the end of December 2023. Long-term debt was $1.8 billion compared with $2 billion at the end of December 2023.
In the first three months of 2024, Zebra Technologies generated net cash of $125 million in operating activities against $76 million cash used at the end of the year-ago period. In the same period, the company incurred a capital expenditure of $14 million. Free cash inflow was $111 million in the quarter against free cash outflow of $92 million in the year-ago period.
Guidance
For the second quarter of 2024, Zebra Technologies expects net sales to decline 1-5% year over year. Adjusted EBITDA margin is anticipated to be slightly above 19% for the quarter. Adjusted earnings per share are expected to be $2.60-$2.90.
For 2024, the company expects net sales to increase 1-5% compared with 2023. Adjusted earnings per share are anticipated to be $11.25-$12.25. The effective tax rate is expected to be approximately 17%. The adjusted EBITDA margin is anticipated to be almost 20%. ZBRA expects free cash flow to be at least $600 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.78% due to these changes.
VGM Scores
Currently, Zebra has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Zebra has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.