Investment Thesis
Zebra demonstrates solid operational fundamentals with strong revenue growth (8.3% YoY) and exceptional cash generation (FCF of $831M with 15.4% margin), supported by robust interest coverage of 140x. However, deteriorating profitability is a concern, with net income declining 20.6% YoY despite revenue growth, indicating margin compression and rising costs that warrant monitoring.
ZBRA Strengths
- Exceptional free cash flow generation ($831M) with healthy 15.4% FCF margin, providing substantial capital allocation flexibility
- Strong gross margin of 48.1% demonstrates pricing power and efficient production in industrial automation sector
- Outstanding interest coverage ratio of 140x indicates minimal debt service risk and financial stability despite $2.4B long-term debt
- Consistent revenue growth of 8.3% YoY shows market demand for products and services
ZBRA Risks
- Significant net income decline of 20.6% YoY with diluted EPS falling 19.6% despite positive revenue growth signals margin pressure and operational challenges
- Current ratio of 0.97x below 1.0x threshold indicates potential short-term liquidity stress and working capital constraints
- Operating margin compression to 13.0% from implied higher levels suggests rising operating expenses outpacing revenue growth
- Low cash position of $125M relative to $8.5B total assets and $2.4B debt raises refinancing and operational flexibility concerns
Key Metrics to Watch
- Net margin recovery trajectory and operating expense control in subsequent quarters
- Working capital management and current ratio improvement to strengthen liquidity position
- Free cash flow sustainability as capital expenditure levels and whether margin compression continues
ZBRA Financial Metrics
ZBRA Profitability Ratios
ZBRA Balance Sheet & Liquidity
ZBRA 5-Year Financial Trend
5-Year Trend Summary: ZEBRA TECHNOLOGIES CORP's revenue has remained relatively flat over the 5-year period, with a 4% decline. The most recent EPS of $5.72 reflects profitable operations.
ZBRA Growth Metrics (YoY)
ZBRA Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.3B | $101.0M | $1.97 |
| Q2 2025 | $1.2B | $112.0M | $2.17 |
| Q1 2025 | $1.2B | $115.0M | $2.23 |
| Q3 2024 | $956.0M | -$15.0M | $-0.28 |
| Q2 2024 | $1.2B | $113.0M | $2.17 |
| Q1 2024 | $1.2B | $115.0M | $2.23 |
| Q3 2023 | $956.0M | -$15.0M | $-0.28 |
| Q2 2023 | $1.2B | -$98.0M | $-1.87 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ZBRA Capital Allocation
ZBRA SEC Filings
Access official SEC EDGAR filings for ZEBRA TECHNOLOGIES CORP (CIK: 0000877212)