Zebra Tech (ZBRA) AI Stock Analysis

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Zebra Tech

(NASDAQ:ZBRA)

65Neutral

Zebra Technologies shows solid financial performance and strong cash flow generation, supporting a healthy financial position. However, technical indicators suggest bearish market sentiment, and valuation metrics are not overly attractive. The cautious outlook for 2025 due to external uncertainties tempers enthusiasm for the stock.

Positive Factors

Earnings

Q4 revenue increased 32% y/o/y, benefiting from easy comps and ahead of Street expectations.

Market Trends

ZBRA is seen as a beneficiary of longer-term automation and digitization adoption trends, supporting organic sales growth and earnings per share growth.

Technological Innovation

Zebra Technologies is well positioned for innovations around AI and expanding RFID use cases due to its leadership and key partnerships.

Negative Factors

Financial Performance

ZBRA’s full-year outlook fell short of Street expectations, owing in large part to headwinds from import tariffs and broader uncertainty in the markets.

Macroeconomic Factors

Current macroeconomic uncertainty and the discretionary nature of automation spending could delay larger projects and limit adoption of ZBRA’s high-growth products.

Valuation

The current trading valuation of Zebra Technologies is considered high, with recovery largely built into the price.

Zebra Tech (ZBRA) vs. S&P 500 (SPY)

Market Cap

$12.47B

Dividend YieldN/A

Average Volume (3M)687.03K

Price to Earnings (P/E)22.0

Beta (1Y)1.68

Revenue Growth8.07%

EPS Growth78.02%

CountryUS

Employees9,900

SectorTechnology

Sector Strength49

IndustryCommunication Equipment

Share Statistics

EPS (TTM)10.17

Shares Outstanding51,143,320

10 Day Avg. Volume846,052

30 Day Avg. Volume687,034

Financial Highlights & Ratios

PEG Ratio0.28

Price to Book (P/B)N/A

Price to Sales (P/S)2.99

Price to Cash Flow (P/CF)12.20

P/FCF Ratio12.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$358.38

Price Target Upside58.97% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Zebra Tech Business Overview & Revenue Model

Company DescriptionZebra Technologies Corporation (ZBRA) is a global leader in providing enterprise-level data capture and automatic identification solutions. The company operates in sectors such as retail, healthcare, transportation and logistics, manufacturing, and other industries that require tracking and visibility solutions. Zebra's core products and services include barcode scanners, mobile computers, specialty printers, RFID solutions, and software analytics that help businesses improve productivity and operational efficiency.

How the Company Makes MoneyZebra Technologies makes money primarily through the sale of its hardware products, such as barcode scanners, mobile computers, and printers, which are integral to supply chain management and asset tracking. The company also generates revenue from its software solutions and services, including analytics platforms that provide insights into business operations. In addition, Zebra has established significant partnerships with large enterprises across various industries, which enhance its market reach and adoption of its technology solutions. A growing portion of its revenue comes from recurring sources, such as software subscriptions, maintenance, and support services, which provide a steady income stream and strengthen customer relationships.

Zebra Tech Financial Statement Overview

Summary

Zebra Tech demonstrates solid financial health across its income statement, balance sheet, and cash flow statement. The company shows strong profitability and efficiency in its operations, as evidenced by improving margins and revenue growth. The balance sheet is stable with manageable debt levels, and the cash flow statement reflects strong cash generation and conversion. Overall, Zebra Tech is well-positioned for sustainable growth with a balanced financial strategy.

Income Statement

Positive

Zebra Tech shows strong gross profit margins, consistently over 40%, indicating effective cost management and pricing strategies. The net profit margin has improved significantly from the previous year, rising to 10.6% in 2024 from 6.5% in 2023, showcasing improved profitability. The revenue growth rate from 2023 to 2024 is 8.67%, which is a healthy sign of business expansion, albeit slower than previous years. EBIT and EBITDA margins have also improved, indicating better operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.65 in 2024, showing moderate leverage. Return on Equity (ROE) improved to 14.7% in 2024, indicating efficient utilization of equity. However, the equity ratio stands at 45.0%, suggesting a balanced but not overly conservative capital structure. Overall, the company maintains a stable balance sheet with manageable debt levels.

Cash Flow

Positive

Zebra Tech's cash flow performance is robust, with a significant turnaround in free cash flow from negative in 2023 to positive in 2024, highlighting improved cash generation capabilities. The operating cash flow to net income ratio of 1.92 in 2024 indicates strong cash conversion efficiency. The company's free cash flow to net income ratio of 1.81 suggests effective cash management and the ability to fund operations and growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.98B	4.58B	5.78B	5.63B	4.45B
	Gross Profit
2.41B	2.12B	2.62B	2.63B	2.00B
	EBIT
742.00M	481.00M	1.35B	979.00M	651.00M
	EBITDA
937.00M	652.00M	1.14B	1.17B	736.00M
	Net Income Common Stockholders
528.00M	296.00M	463.00M	837.00M	504.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
901.00M	137.00M	105.00M	332.00M	168.00M
	Total Assets
7.97B	7.31B	7.53B	6.21B	5.38B
	Total Debt
2.33B	2.41B	2.16B	1.11B	1.37B
	Net Debt
1.43B	2.28B	2.06B	780.00M	1.21B
	Total Liabilities
4.38B	4.27B	4.80B	3.23B	3.23B
	Stockholders Equity
3.59B	3.04B	2.73B	2.98B	2.14B
Cash Flow		Free Cash Flow
954.00M	-91.00M	413.00M	1.01B	895.00M
	Operating Cash Flow
1.01B	-4.00M	488.00M	1.07B	962.00M
	Investing Cash Flow
-57.00M	-92.00M	-968.00M	-546.00M	-641.00M
	Financing Cash Flow
-190.00M	117.00M	253.00M	-371.00M	-157.00M

Zebra Tech Technical Analysis

Technical Analysis Sentiment

Negative

Last Price225.44

Price Trends

50DMA

301.12

Negative

100DMA

349.84

Negative

200DMA

349.39

Negative

Market Momentum

MACD

-10.84

Negative

RSI

37.53

Neutral

STOCH

26.38

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZBRA, the sentiment is Negative. The current price of 225.44 is below the 20-day moving average (MA) of 265.79, below the 50-day MA of 301.12, and below the 200-day MA of 349.39, indicating a bearish trend. The MACD of -10.84 indicates Negative momentum. The RSI at 37.53 is Neutral, neither overbought nor oversold. The STOCH value of 26.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZBRA.

Zebra Tech Risk Analysis

Zebra Tech disclosed 40 risk factors in its most recent earnings report. Zebra Tech reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Zebra Tech Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FLEX	78 Outperform	$12.10B	11.91	18.45%	―	-12.94%	47.70%
NTAP	68 Neutral	$17.77B	15.93	114.33%	2.50%	5.46%	23.49%
ZBRA	65 Neutral	$12.47B	21.95	15.95%	―	8.07%	78.02%
WDC	64 Neutral	$12.63B	8.32	13.99%	―	38.59%	―
JBL	63 Neutral	$14.17B	31.64	24.10%	0.24%	-14.45%	-64.32%
PSTG	60 Neutral	$13.67B	134.29	8.29%	―	11.92%	74.08%
Sector *	57 Neutral	$19.52B	9.58	-12.47%	2.79%	5.43%	-24.71%

* Technology Sector Average

Performance Comparison

ZBRA

Zebra Tech

225.44

-57.56

-20.34%

FLEX

Flex

29.59

1.51

5.38%

JBL

Jabil

131.94

-0.38

-0.29%

NTAP

NetApp

82.64

-17.79

-17.71%

WDC

Western Digital

34.40

-18.82

-35.36%

PSTG

Pure Storage

41.08

-11.22

-21.45%

Zebra Tech Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -36.12% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a balanced sentiment, with strong performance in the fourth quarter and strategic acquisitions and innovations, but tempered by challenges in the manufacturing sector, tariff impacts, and an uncertain outlook for 2025.

Highlights

Strong Fourth Quarter Performance

Zebra Technologies delivered results above their outlook with sales exceeding $1.3 billion, a 32% increase compared to the prior year. Adjusted EBITDA margin reached 22.1%, a nearly 7% increase, and non-GAAP diluted earnings per share doubled to $4.

Record Free Cash Flow

For the full year, Zebra generated $954 million of free cash flow with a 136% free cash flow conversion rate and ended the year with a 1.2x net debt to adjusted EBITDA leverage ratio.

Geographic Sales Growth

Sales grew 36% in North America, 24% in EMEA, 30% in Asia-Pacific, and 40% in Latin America, with particularly strong performance in Brazil.

Acquisition of Photoneo

Zebra agreed to purchase Photoneo, a leading 3D machine vision company, for approximately EUR 60 million, expanding their capabilities in automotive manufacturing, logistics, and other key markets.

Innovative AI Solutions

Zebra launched AI-based machine vision offerings and demonstrated AI-powered modern store solutions at the National Retail Federation trade show, showcasing their commitment to innovation in retail technology.

Lowlights

Manufacturing Sector Lagging

Despite overall sales growth, the manufacturing sector lagged behind other end markets, creating a challenge for future growth.

Tariffs Impacting Profit

Incremental tariffs from China and Mexico are expected to impact gross profit by approximately $20 million in 2025, peaking in Q2, with a total unmitigated impact potentially exceeding $60 million annually.

Uncertain 2025 Outlook

Zebra's visibility beyond Q1 is lower than usual due to an uncertain environment, including dynamic global trade, geopolitical, and macroeconomic factors, with cautious sales growth guidance of 3% to 7% for the year.

Impact of Strong U.S. Dollar

The strong U.S. dollar has created a headwind for sales growth, affecting the company's international competitiveness and customer plans.

Company Guidance

During the call, Zebra Technologies provided several key metrics highlighting their strong performance in the fourth quarter of 2024 and their cautious outlook for 2025. The company reported a 32% year-over-year increase in sales, achieving over $1.3 billion, and an adjusted EBITDA margin of 22.1%, reflecting a 7% improvement. Non-GAAP diluted earnings per share more than doubled to $4. For the full year, Zebra generated $954 million in free cash flow, achieving a 136% free cash flow conversion rate. Looking forward, the company anticipates first-quarter sales growth of 8% to 11%, with adjusted EBITDA margin expected around 21%. For the full year 2025, Zebra projects sales growth between 3% and 7%, an adjusted EBITDA margin of 21% to 22%, and non-GAAP diluted earnings per share ranging from $14.75 to $15.25. Despite solid backlog and demand trends, the outlook remains cautious due to geopolitical and macroeconomic uncertainties, including new tariffs that are expected to impact gross profit by approximately $20 million in 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.