On Thursday, Truist Securities initiated coverage on Zebra Technologies (NASDAQ:ZBRA), assigning a Hold rating to the company's shares with a price target set at $300. The firm highlighted the positive secular trends that support Zebra Technologies' continued growth, particularly in the realm of enterprise asset intelligence.
Zebra Technologies, which reported $4.5 billion in sales for 2023, operates within a total addressable market estimated at $30 billion. Truist Securities pointed out that Zebra is expected to maintain an organic growth rate of 5-7% throughout the business cycle. This growth is anticipated to be driven by the company's efforts to penetrate new markets such as healthcare, government, and manufacturing where Zebra's products are currently underrepresented.
The firm also noted Zebra's strategic moves to expand its geographic footprint, specifically mentioning the company’s leverage of its Matrox acquisition to grow in markets like Japan. Zebra Technologies' growth is further supported by the increasing adoption of its tablets as manufacturing customers transition from stationary computers to mobile computing devices. Additionally, the company is benefiting from the accelerating penetration of RFID technology as costs decrease and the technology of tags advances.
Truist Securities believes that Zebra has the potential to capitalize on these trends and may also pursue acquisitions in the higher growth sectors of machine vision and robotics to bolster its market position. The coverage initiation by Truist Securities reflects a recognition of Zebra Technologies' strategic initiatives and its potential to tap into various growth opportunities within its industry.
InvestingPro Insights
Zebra Technologies (NASDAQ:ZBRA) is capturing the attention of analysts and investors alike. With a Hold rating from Truist Securities and a $300 price target, it's essential to delve into the financial metrics and market sentiment that may be influencing this perspective. According to InvestingPro data, Zebra Technologies has a market capitalization of $14.54 billion, indicating a substantial presence in the market. However, the company trades at a high earnings multiple, with a P/E ratio of 49.45 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 37.72, which suggests that investors are expecting high earnings growth in the future.
InvestingPro Tips highlight that Zebra Technologies has been profitable over the last twelve months, with a gross profit of $2.123 billion and a gross profit margin of 46.31%. These figures demonstrate the company's ability to maintain profitability despite challenging conditions. Additionally, analysts have revised their earnings upwards for the upcoming period, reflecting optimism about Zebra's financial performance. However, it's important to note that the company does not pay a dividend, which may be a consideration for income-focused investors.
For those seeking more comprehensive analysis, InvestingPro offers additional insights on Zebra Technologies. There are 7 more InvestingPro Tips available, which can provide a deeper understanding of the company's financial health and market position. Interested readers can explore these tips and make more informed investment decisions by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With the next earnings date set for April 30, 2024, investors will be keenly watching how the company's strategic initiatives and market expansion efforts translate into financial results.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.