Why Shares in Zebra Technologies Fell This Week (and Why They Could Recover)

Core Insights - Zebra Technologies' shares fell by 12.3% following disappointing guidance on third-quarter earnings, despite the actual results being satisfactory [1] - The company's guidance for fourth-quarter sales growth is between 8% to 11%, but this includes a significant favorable impact from acquisitions and foreign exchange [2] - Excluding these factors, the expected sales growth ranges from a decline of 0.5% to an increase of 2.5%, indicating a slowdown in orders [3] Financial Metrics - The current price-to-free cash flow (FCF) multiple for Zebra is 17.1 times the estimated FCF for 2025, suggesting an attractive valuation [4] - The integration of acquired companies is complete, and their contributions should be considered in evaluating Zebra's overall business performance [4] Competitive Landscape - Honeywell's productivity solutions and services (PSS) are experiencing a decline in organic sales, which may create a more favorable competitive environment for Zebra [3][5] - Honeywell is exploring strategic options for PSS, including potential divestiture, which could benefit Zebra in the future [5][7]