Here's Why Investors Should Avoid Zebra Technologies for Now

Core Viewpoint - Zebra Technologies Corporation (ZBRA) is facing significant challenges due to rising costs, high debt levels, and foreign exchange issues [1][5][6][8]. Group 1: Financial Performance - ZBRA's cost of sales increased by 22.3% year over year in Q4 2024, primarily due to high raw material costs [5]. - Selling and administrative expenses rose by 11% year over year, contributing to the overall increase in costs [5]. - The company's long-term debt reached $2.09 billion at the end of Q4 2024, with a compound annual growth rate (CAGR) of 18.9% over the past five years [6]. - Interest expenses in Q4 were notably high at $98 million [6]. Group 2: Debt Management - In Q2 2024, ZBRA completed a $500 million offering of senior notes due June 1, 2032, with a fixed interest rate of 6.5% [7]. - While this offering may assist in reducing some loan obligations, it is expected to increase the overall debt balance [7]. Group 3: Market Exposure and Risks - ZBRA operates in various regions, including North America, EMEA, Asia-Pacific, and Latin America, which exposes the company to geopolitical risks [8]. - Ongoing conflicts, such as those between Russia & Ukraine and Israel & Iran, may adversely affect business operations [8]. - A stronger U.S. dollar could negatively impact ZBRA's performance in overseas markets [8].