Yahoo Finance Here's Why Zebra Technologies (ZBRA) is an Attractive Pick
Zebra Technologies Corporation ZBRA is poised to benefit from increased units under support contracts, cost-management actions, acquired assets and shareholder-friendly moves.
Let’s delve into the factors that make this Zacks Rank #1 (Strong Buy) company a smart investment choice at the moment.
Growth Across Services and Software: Zebra Technologies is seeing growth across businesses. Increased units under support contracts and retail software wins are aiding sales of services and software. Increased sales of RFID products, driven by the robust demand in retail and retail apparel markets, and increased parcel tracking in transportation logistics markets and airports are aiding the company’s growth. Also, Zebra Technologies has been advancing digital capabilities, optimizing the supply chain, expanding its data analytics capability and focusing on marketing activities to better engage with customers.
Cost Management Initiatives: The company remains focused on cost-management actions. Its operating expenses declined 8.6% year over year in the first quarter, driven by its cost-saving actions. Also, Zebra Technologies’ gross margin increased 40 basis points to 47.9%, supported by lower freight costs. Recently, the company expanded the scope of its 2022 productivity plan and introduced an employee voluntary retirement plan. These actions are anticipated to impact more than 9% of its global employee base, which is likely to generate an annualized net cost savings of about $120 million. These efforts are likely to boost margins and produce more fuel to invest in organic growth.
Accretive Acquisitions: The company solidified its product portfolio and leveraged business opportunities by adding assets. ZBRA’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. Also, with the buyout of Adaptive Vision (May 2021), the company entered into the fixed industrial scanning and machine vision end markets. It boosted its fixed industrial scanning and machine vision solution offerings.
Rewards to Shareholders: Zebra Technologies’ measures to continue rewarding its shareholders despite the slowdown in markets hold promise. Though the company did not repurchase any shares in the first three months of 2024, it repurchased shares worth $52 million in 2023. In May 2022, its board of directors authorized a share repurchase program for up to $1 billion. At the end of the first quarter, the company had $893 million remaining under this program.
Northward Estimate Revision: The Zacks Consensus Estimate for ZBRA’s 2024 earnings has been revised 9.3% upward in the past 60 days.
Price Performance: Shares of Zebra Technologies have gained 12.2% in the year-to-date period, outperforming the industry’s 9.7% growth.
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Other Stocks to Consider
Some other top-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank of 1. It has a trailing four-quarter average earnings surprise of 8.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AIT’s fiscal 2024 earnings has improved 1.4% in the past 60 days. The stock has risen 10.4% in the year-to-date period.
Belden Inc. BDC presently carries a Zacks Rank #2 (Buy) and has a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have gained 21.9% in the year-to-date period.
Crane Company CR presently carries a Zacks Rank of 2. CR delivered a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has increased 4.2% in the past 60 days. Its shares have gained 24.1% in the year-to-date period.
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
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Crane Company (CR) : Free Stock Analysis Report
Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report
