Skip to Content

Zebra Technologies Corp ZBRA

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Zebra Is Taking the Plunge Into Software, but Not as Fast as the Market Thinks; Shares Overvalued

Analyst Note

| William Kerwin |

We are raising our fair value estimate for Zebra Technologies to $270 per share from $255 and maintaining our narrow moat rating. Zebra is a leading provider of automatic identification and data capture, or AIDC, technology, selling barcode printers, scanners, and mobile computers to improve supply chain and in-store efficiency at its customers. Our fair value estimate reflects our expectations for the firm’s foray into software to expand margins from historical highs, and for secular trends of digitization and automation to fuel top-line growth, with omnichannel retail and digital transformation in healthcare acting as tailwinds. Nevertheless, we think the market has gotten overly exuberant about Zebra’s software prospects, with 60% price appreciation since the end of September. We applaud the firm’s pivot into software, but at less than 10% of sales, it doesn't warrant current softwarelike multiples, in our view. We recommend waiting for a pullback.

Read Full Analysis

Company Profile

Business Description

Zebra Technologies is a leading provider of automatic identification and data capture technology to enterprises. Its solutions include barcode printers and scanners, mobile computers, and workflow optimization software. The firm primarily serves the retail, transportation logistics, manufacturing, and healthcare markets, designing custom solutions to improve efficiency at its customers.

Contact
3 Overlook Point
Lincolnshire, IL, 60069
T +1 847 634-6700
Sector Technology
Industry Communication Equipment
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 8,200