Group 1 - The article discusses the positions of various analysts and their affiliations with specific stocks, particularly highlighting Zebra Technologies [1] - It mentions that The Motley Fool has positions in and recommends Zebra Technologies, indicating a positive outlook on the company [1] - The article also notes that one analyst has short positions on Zebra Technologies, suggesting a mixed sentiment among analysts regarding the stock [1]

Core Insights - Zebra Technologies Corporation (ZBRA) has underperformed in operational performance, leading to a Zacks Rank of 5 (Strong Sell) with a stock loss of 3.2% over the past year, consistent with industry trends [1] Rising Costs - ZBRA experienced an 8.3% year-over-year increase in the cost of sales in Q1 2025, primarily due to high raw material costs [4] - Selling and marketing expenses also rose by 8.8% year-over-year, indicating escalating operational costs that may negatively impact profitability in the future [4] High Debt Level - The company's long-term debt has grown at a CAGR of 18.9% over the past five years, reaching $2.10 billion by the end of Q1 2025, a slight increase from $2.09 billion at the end of 2024 [5] - Interest expenses surged by 35.3% year-over-year in Q1, totaling $23 million, raising concerns about the sustainability of its financial structure [5][8] - ZBRA completed a $500 million senior notes offering with a fixed interest rate of 6.5%, which, while aimed at reducing term loan obligations, will add to the existing debt burden [6] Forex Woes - The company operates in multiple regions, exposing it to geopolitical risks, including conflicts in Russia & Ukraine and tensions in U.S.-China relations, which could adversely affect business operations [7] - A stronger U.S. dollar poses additional challenges, potentially impacting ZBRA's performance in overseas markets [7][8]

Core Insights - Zebra Technologies Corporation (ZBRA) has launched the EM45 Enterprise Mobile, an Android-based handheld mobile computer designed for various industries [1][7] - The device supports multiple user profiles and features an AI-capable Qualcomm processor, enhancing its functionality for professional and personal use [2][7] - The EM45 is equipped with a high-capacity battery that provides up to 25 hours of uninterrupted power, aimed at improving productivity for frontline workers [3] Product Features - The EM45 Enterprise Mobile includes one-touch push-to-talk communication and three actionable buttons for quick barcode scanning and emergency alerts [2] - It is designed for retail, logistics, and healthcare sectors, facilitating tasks such as reading digital wallets, scanning products, accepting payments, and tracking [4][7] - The device features a 50MP camera for capturing clear photos and videos, as well as scanning barcodes efficiently [4] Financial Performance - Zebra Technologies is experiencing increased sales in mobile computing and data capture solutions, particularly within the Enterprise Visibility & Mobility segment [5] - Higher sales of RFID products are positively impacting the Asset Intelligence & Tracking segment, although the company faces challenges from increased costs and foreign currency headwinds [5] - ZBRA's stock has declined by 25.1% year-to-date, aligning with industry trends, and currently holds a Zacks Rank of 4 (Sell) [6]

Summary of Zebra Technologies (ZBRA) FY Conference Call - June 04, 2025 Company Overview - **Company**: Zebra Technologies - **Industry**: Industrial technology, focusing on barcode printers, mobile computers, RFID, robotics, and machine vision [3][6] Core Points and Arguments - **Investment Opportunity**: Zebra is integral to customers' digitization and automation efforts, enhancing efficiency and workflow automation [6][7] - **Market Leadership**: Zebra is the market leader in barcode scanning and mobile computing, with a strong portfolio that includes machine vision, retail software, and ruggedized tablets [7][9] - **Financial Performance**: - Revenue in 2024 was over $3 billion for enterprise visibility and mobility, and over $1.5 billion for asset tracking [9] - Experienced growth of 20% in 2021 and sustained growth in 2022, with a recovery to 8% growth in 2024 after a pause in 2023 [11][12] - Generated over $1 billion in cash over the last four quarters, with the highest gross margin in ten years [13] - **Vertical Markets**: - Retail: Focus on enhancing customer experience and optimizing inventory [14] - Transportation and Logistics (T&L): Emphasis on productivity and visibility [15] - Manufacturing: Lagging recovery but opportunities exist for market share expansion [16] - Healthcare: Solutions aimed at improving workflows and productivity [17] Additional Important Content - **R&D Investment**: Zebra invests about 10% of sales in R&D, focusing on emerging technologies and maintaining leadership in core markets [19][20] - **M&A Strategy**: Active in expanding into adjacent markets through M&A, ensuring integration into core operations [21] - **Market Trends**: The company is positioned to benefit from megatrends such as the on-demand economy and intelligent automation [22] - **Financial Framework**: Focus on profitable growth, disciplined financial management, and capital allocation strategies [24][26] - **Supply Chain Diversification**: Reduced reliance on China from 85% to less than 50%, with plans to further diversify [40][41] - **Pricing Strategy**: Implemented a 10% price increase in April, expected to contribute approximately $50 million in revenue for the year [44][45] - **RFID Growth**: RFID business approaching $200 million, experiencing double-digit growth, driven by improved chip costs and ROI [51][53] Conclusion - Zebra Technologies is well-positioned for continued growth, leveraging its strong market position, innovative solutions, and strategic investments in technology and supply chain diversification. The company aims for 5-7% growth over the cycle, with a focus on margin expansion and maintaining a robust cash flow profile [22][23][27]

Financial Data and Key Metrics Changes - Zebra Technologies reported revenues of $5 billion, indicating a recovery from the pandemic period surge and subsequent demand digestion, with broad-based growth across its portfolio [8][11][12] - The company anticipates a long-term growth rate of 5% to 7%, with core product portfolio growth at 4% to 5% and faster growth in adjacent markets like RFID and machine vision [14][18][19] Business Line Data and Key Metrics Changes - The company has seen double-digit growth in the first quarter across all vertical markets, although manufacturing is recovering more slowly compared to other segments [12][13] - Zebra's core product portfolio includes mobile devices, scanners, and printing solutions, with new growth areas in robotics and AI-enhanced retail software [15][18][19] Market Data and Key Metrics Changes - Zebra serves a diverse customer base, including over 80% of Fortune 500 companies, and has maintained strong relationships across various sectors such as retail, transportation, logistics, healthcare, and manufacturing [8][12] - The company has noted that while global trade uncertainties are on customers' minds, they have not significantly altered buying behavior [12][67] Company Strategy and Development Direction - Zebra is focused on profitable growth, investing in R&D (approximately 10% of revenue) to enhance its core offerings and expand into new markets like RFID and robotics [62][63] - The company aims to increase recurring revenue from software and services, which currently represents about 25% of its business [59][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver the projected growth rate despite past fluctuations due to the pandemic [22][23] - The company is actively working to mitigate tariff impacts and has diversified its supply chain, reducing reliance on China for U.S. shipments [71][72] Other Important Information - Zebra is leveraging AI to enhance productivity and decision-making capabilities for frontline workers, integrating AI into its mobile devices and internal operations [50][56] - The company has a strategic approach to acquisitions, preferring organic growth but remaining open to bolt-on acquisitions in adjacent markets [64][66] Q&A Session Summary Question: What is customer onboarding time and how much time and cost would it take them if they want to switch to another competitor? - The majority of customers typically deploy and make decisions around a single vendor, leading to a sticky product lifecycle of about five years, making it challenging to switch to competitors [83] Question: With RFID, can you talk through the process of customer adoption? Is there a bottleneck in that customers need a modern tech stack before first deploying the technology? - Adoption of RFID involves source tagging at the manufacturing stage, and the journey includes using handheld devices, moving to portals, and then to perpetual reading systems [85][88][89]

Summary of Zebra Technologies (ZBRA) FY Conference Call - May 21, 2025 Company Overview - **Company**: Zebra Technologies (ZBRA) - **Event**: FY Conference Call - **Date**: May 21, 2025 Key Points Revenue Growth Guidance - **2025 Revenue Growth Guidance**: Expected to be between **3% to 7%** [3][4] - **Q1 Performance**: Achieved high end of guidance with strong demand trends [3] - **Q2 Guidance**: Mid single-digit growth anticipated [3] - **Customer Project Delays**: No significant delays reported due to tariff uncertainties [3][4] Market Conditions and Customer Sentiment - **Tariff Impact**: Ongoing monitoring of macroeconomic conditions and customer plans due to tariff uncertainties [4][5] - **Customer Conversations**: Discussions with CIOs indicate tariffs are a primary concern but have not significantly impacted project timelines [5][6] Demand Trends by Vertical - **Vertical Performance**: Accelerated growth across verticals, with manufacturing showing high single-digit growth, lagging behind other sectors [9][10] - **Digitization and Automation**: Customers are focusing on digitizing workflows and improving operational efficiency [9][10] Large Order Activity - **Large Orders**: Currently below 2021 and 2022 peak levels, with customers still absorbing previous deployments [12][13] Tariff Math and Pricing Strategy - **Tariff Costs**: Estimated impact of **$70 million** for the year, with **$50 million** offset by pricing increases [16][17] - **Price Increases**: A **10% price increase** implemented across most products to mitigate tariff impacts [20][21] - **Demand Elasticity**: No significant demand changes observed post-price increase, but monitoring continues [24] Long-term Growth and Market Position - **Long-term Growth Target**: Committed to **5% to 7%** organic growth over the cycle [38] - **Installed Base**: Mobile computing installed base is **35% higher** than in 2019, indicating growth potential [43] Margin and Profitability - **EBITDA Margin Guidance**: Expecting a **50 basis points contraction** due to tariffs, but core margins remain strong [44][45] - **Record Gross Margins**: Achieved the best gross margin since the Motorola acquisition [45] Machine Vision and Software Business - **Machine Vision Growth**: Excitement around the machine vision business as a long-term growth driver, especially post-acquisition of Fotoneo [48][49] - **Software Integration**: Launch of WorkCloud Sync to enhance software offerings and integrate with mobile computing [51][52] Capital Allocation and M&A Strategy - **Free Cash Flow**: Generated over **$1 billion** in free cash flow over the last four quarters, allowing for active capital return [53] - **M&A Criteria**: Focus on strategic fit, synergies, and cultural alignment for potential acquisitions [56] Inventory Management - **Channel Inventory**: Currently working through **$50 million to $100 million** of excess inventory, with plans to normalize levels by 2026 [64][65] Additional Insights - **Sourcing Strategy**: Aiming to reduce reliance on China for imports, currently at **30%**, with plans to further decrease [30][31] - **Production Flexibility**: Leveraging third-party manufacturers to maintain flexibility in production locations [36][35] This summary encapsulates the key insights and data points from the Zebra Technologies FY Conference Call, highlighting the company's current performance, market conditions, and strategic outlook.

Core Viewpoint - Zebra Technologies is strategically positioned to manage incoming tariff expenses due to lessons learned from the COVID-19 pandemic and subsequent supply chain challenges, leading to strong financial performance in the first quarter of 2024 [1][2]. Financial Performance - In the first quarter, Zebra reported an 11% year-over-year increase in revenues and a 42% rise in earnings, surpassing Wall Street's consensus estimates [1]. - The company anticipates direct tariff costs of approximately $30 million in Q2 2025 and $70 million for the entire fiscal year [4]. - Tariff expenses are expected to impact adjusted EBITDA, which was $292 million in Q2 and $1.05 billion for fiscal year 2024, representing roughly 10% of adjusted EBITDA profits in the next quarter and less than 7% for the full year [5]. Supply Chain Management - Zebra has diversified its supply chain, reducing shipments from China to the U.S. from 85% to an expected 30% by the end of Q2, enhancing supply chain resiliency [8]. - While most manufacturing can be relocated, some key components are still sourced from China, indicating that tariff costs will not be entirely avoidable [9][10]. Market Outlook - The demand for data-tracking services and supply chain analytics is expected to drive revenue growth and margin expansion for Zebra [11]. - Despite a 34% decline in stock price over the last three months, trading at 13 times free cash flows, the market's reaction may be overly pessimistic given Zebra's anticipated robust sales growth and manageable tariff impact [12]. - Investing in Zebra is seen as a strategic opportunity for long-term growth in data-driven sectors such as shipping, manufacturing, and retail [13].

Group 1 - The "Trump Tariff Losers" index increased by 0.85%, reaching 84.49 points [1] - Zebra Technologies saw a rise of 5.16%, while Five Below increased by 3.12% [1] - Gap and Coach also experienced gains, with increases of 1.35% and 1.13% respectively [1] Group 2 - Dollar Tree rose by 0.9%, indicating a positive performance among some retailers [1] - Best Buy declined by 1.19%, and Harley-Davidson fell by 1.24%, showing mixed results in the sector [1]

Financial Data and Key Metrics Changes - In Q1 2025, Zebra Technologies reported sales exceeding $1,300,000,000, representing a 12% increase compared to the prior year [7] - Adjusted EBITDA margin was 22.3%, a 240 basis point increase year-over-year [7][12] - Non-GAAP diluted earnings per share were $4.2, a 42% increase from the previous year [7][12] - Adjusted gross margin increased by 150 basis points to 49.6% due to favorable business mix and volume leverage [11] Business Line Data and Key Metrics Changes - Asset Intelligence and Tracking segment sales increased by 18% [10] - Enterprise Visibility and Mobility segment sales grew by 9% [10] - Strong sales growth was observed across all major product categories and regions, with double-digit growth in most vertical end markets [7][10] Market Data and Key Metrics Changes - North America sales grew by 7%, with notable strength in data capture, print, and RFID [11] - EMEA sales increased by 18%, particularly strong in Northern Europe [11] - Asia Pacific sales rose by 13%, led by Australia and New Zealand [11] - Latin America sales grew by 18%, with significant strength in Mexico [11] Company Strategy and Development Direction - The company is focused on returning to profitable growth, extending market leadership, and advancing its portfolio of solutions [5] - Zebra Technologies is diversifying its supply chain beyond China and maintaining a capital-light business model to remain agile [5][14] - The company continues to invest approximately 10% of sales in research and development to enhance its innovative solutions [22] Management's Comments on Operating Environment and Future Outlook - Management noted that demand remained strong into Q2 2025, supported by robust retail year-end spending [6][31] - The company is cautious about the global trade environment and its potential impact on customer behavior, but has not observed significant changes in purchasing behavior to date [32][76] - The anticipated impact from U.S. import tariffs is estimated to be $70,000,000 for the full year, which is $50,000,000 higher than prior guidance [20] Other Important Information - Zebra Technologies generated $158,000,000 of free cash flow in Q1 2025 [12] - The company repurchased $125,000,000 of stock in Q1 and an additional $75,000,000 in April [13] - The acquisition of Photo Neo, a leading 3D machine vision company, is expected to contribute approximately 30 basis points to Zebra's overall sales growth in 2025 [13] Q&A Session Summary Question: Demand picture and changes throughout the quarter - Management indicated that demand remained strong through April, supported by strong retail spending from the previous year [31][32] Question: Actions regarding tariffs and manufacturing footprint - Management discussed ongoing assessments of the manufacturing footprint and strategies to mitigate tariff impacts, including diversifying supply chains and adjusting production locations [32] Question: Manufacturing end market performance - Manufacturing showed high single-digit growth but lagged behind other verticals, with management noting ongoing improvements [38] Question: Pricing increases and realization - Management expressed confidence in the ability to implement price increases effectively, aligning with competitive actions in the market [70][72] Question: Visibility into demand and customer behavior - Management noted improved visibility into demand but highlighted ongoing uncertainty related to tariffs affecting customer sentiment [76] Question: Tariff impacts and mitigation strategies - Management confirmed that the anticipated tariff impact for the year is $70,000,000, with ongoing efforts to mitigate this through various strategies [20][114]

Core Viewpoint - Zebra Technologies Corporation (ZBRA) reported strong first-quarter 2025 results, with adjusted earnings per share of $4.02, exceeding estimates and showing a significant year-over-year increase of 41.5% from $2.84 [1][2] Financial Performance - Total revenues reached $1.31 billion, surpassing the consensus estimate of $1.28 billion, and reflecting an 11.3% year-over-year growth driven by the Enterprise Visibility & Mobility and Asset Intelligence & Tracking segments [2] - The Asset Intelligence & Tracking segment saw revenues rise by 17.9% year over year to $462 million, exceeding the consensus estimate of $434 million, with organic net sales increasing by 18.4% [2] - The Enterprise Visibility & Mobility segment reported revenues of $846 million, an 8.1% increase year over year, though slightly below the consensus estimate of $852 million, with organic net sales up by 8.6% [3] Margin and Cost Analysis - Cost of sales for the first quarter totaled $663 million, an increase of 8.3% year over year, while total operating expenses rose by 11.4% to $450 million [4] - Net income for the quarter was $136 million, compared to $115 million in the same period last year [4] Balance Sheet and Cash Flow - At the end of the first quarter, cash and cash equivalents stood at $879 million, down from $901 million at the end of December 2024, while long-term debt increased slightly to $2.1 billion [5] - The company generated net cash of $178 million from operating activities, up from $125 million in the previous year, with free cash flow amounting to $158 million compared to $111 million a year ago [6] Guidance - For the second quarter of 2025, ZBRA expects net sales to grow between 4-7% year over year, with an anticipated adjusted EBITDA margin of approximately 19% and adjusted earnings per share projected in the range of $3.00-$3.50 [7] - For the full year 2025, the adjusted earnings outlook has been revised to a range of $13.75-$14.75 per share, with net sales expected to increase by 3-7% year over year and free cash flow projected to be at least $700 million [8]