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Orders for German factory goods jumped unexpectedly in June as companies stockpiled parts and equipment to avoid supply chain disruptions. This resilience in manufacturing is a good sign for Zebra, which sells the scanners and tracking hardware these factories use to manage their inventory. While higher costs for materials are a challenge, the fact that industrial customers are still spending suggests the recovery in warehouse equipment demand is holding up.
Source: WSJ
Barclays raised its price target for the stock from $346 to $410 while keeping an Overweight rating, which is their way of saying they expect it to perform better than the broader market. This move comes after the company reported much higher earnings than expected and raised its full-year forecast. The new target is about 11 percent higher than the current price, reflecting confidence that the recovery in warehouse and retail spending is gaining speed.
Source: Barclays
Sales grew 20 percent to about 1.56 billion dollars last quarter, coming in well ahead of what analysts expected. The company earned $6.35 per share, far higher than the $4.36 estimate. This performance shows that the long slump in warehouse equipment spending has ended, with broad growth across all regions and product types.
Management also raised its outlook for the rest of the year and spent 268 million dollars buying back its own shares. A notable detail was the recovery of 73 million dollars in past tariff payments, which helped boost the bottom line. For long-term owners, the key takeaway is that the business has cleared its post-pandemic inventory hurdles and is returning to its historical growth pattern.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company released a study with Oxford Economics showing that businesses in retail and manufacturing see clear financial gains when they automate their daily workflows. While this is a marketing effort, it supports the company's core strategy of moving beyond just selling hardware to selling the software and systems that make workers more efficient. This shift is important for long-term profit margins, as software sales typically earn more profit per dollar than scanners or printers.
Source: Business Wire
Management has a habit of clearing the bar they set, beating analyst profit targets in seven of the last eight quarters. The most recent beat was particularly large as sales grew 20 percent.
| Expectation | |
|---|---|
| EPS | $4.81 |
| Revenue | $1.57B |
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