Zebra Technologies Corporation, based in Lincolnshire, Illinois, has seen its stock price decline sharply, dropping 40.6% over the past year. Despite reporting better-than-expected financial results for the third quarter, the company’s stock fell by 11.7% following the announcement on October 28, 2023. The decline contrasts sharply with the broader market performance, as the S&P 500 Index has gained 10.5% over the same period.
Zebra Technologies specializes in enterprise asset intelligence solutions, operating through two primary segments: Asset Intelligence & Tracking and Enterprise Visibility & Mobility. With a market capitalization of approximately $11.7 billion, Zebra has struggled to keep pace with both the general market and its sector. The Technology Select Sector SPDR Fund, for example, has surged 17.8% over the past year.
Despite a notable increase in organic sales, Zebra reported $1.3 billion in net sales for the third quarter, marking a 5.2% year-over-year growth. This performance exceeded analyst expectations by 71 basis points. Additionally, the company achieved an adjusted earnings per share (EPS) of $3.88, which was 3.5% higher than consensus estimates. However, the outlook for the fourth quarter dampened investor sentiment. Zebra anticipates a sales growth of 8% to 11%, which includes an estimated 8.5% boost from acquisitions and foreign currency translation.
Analyst Ratings and Future Projections
Looking ahead, analysts project that Zebra Technologies will deliver an adjusted EPS of $15.83 for the full fiscal year ending in December 2025, reflecting a 17.1% year-over-year increase. The company has a solid track record of surpassing earnings expectations, having done so in each of the last four quarters.
Among the 17 analysts covering Zebra stock, the consensus rating is currently a “Moderate Buy,” which includes 10 “Strong Buys,” one “Moderate Buy,” five “Holds,” and one “Strong Sell.” This sentiment represents a slight decrease in optimism compared to a month ago when there were no “Strong Sell” recommendations on the stock.
On October 29, Jamie Cook, an analyst at Truist Securities, reiterated a “Hold” rating on Zebra, adjusting the price target down from $350 to $331. The current mean price target of $360.50 suggests a potential upside of 57.8% from current levels, while the highest target of $421 indicates an impressive upside potential of 84.3%.
Zebra Technologies continues to navigate a challenging market landscape. With strong underlying sales growth, the company aims to regain investor confidence and improve its stock performance in the coming quarters.
