Evaluating Zebra Technologies (ZBRA) Valuation After Q3 Beat, Softer Outlook, and Elo Acquisition Shift Investor Sentiment

Zebra Technologies (ZBRA) grabbed attention following its third-quarter earnings report, which surpassed expectations. However, the stock took a hit as investors focused on a softer organic growth outlook and shrinking margins.

See our latest analysis for Zebra Technologies.

Even with its upbeat earnings and acquisition-fueled sales guidance, Zebra Technologies’ share price has tumbled nearly 30% year-to-date as investors weigh the knock-on effects of soft organic growth and thinner margins. While the company is integrating new capabilities and buying back stock, the market’s cautious stance is reflected in Zebra’s 1-year total shareholder return of -30%. This follows a strong run over the past three years. Put simply, near-term momentum has faded, but management is steering for brighter prospects ahead.

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With shares down sharply despite upbeat guidance and a strong acquisition pipeline, the big question now is whether the selloff has gone too far or if the market has already factored in Zebra Technologies’ future growth potential.

Most Popular Narrative: 27.7% Undervalued

At $269.25, Zebra Technologies trades notably below the narrative fair value of $372.33. This gap is driven by bullish financial projections and evolving business drivers.

The strategic acquisition of Elo expands Zebra's addressable market by approximately $8 billion, enhances its presence in customer-facing automation and self-service technologies, and provides significant cross-selling and global distribution synergies. This acquisition is expected to be immediately accretive to earnings and to bolster long-term revenue growth.

Read the complete narrative.

What powers this optimistic price target? The answer lies in aggressive growth assumptions, ambitious profitability forecasts, and a future multiple that only top-tier tech companies typically achieve. The complete narrative exposes the bold logic and numbers that make up this underappreciated valuation story. Uncover the full rationale behind these projections for Zebra Technologies.

Result: Fair Value of $372.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain. Persistent tariff pressures and lackluster organic growth could limit upside and challenge the optimism around Zebra Technologies’ story.

Find out about the key risks to this Zebra Technologies narrative.

Another View: What Do Multiples Suggest?

While the narrative approach and analyst price targets suggest Zebra Technologies is undervalued, a simple look at its price-to-earnings ratio tells a mixed story. The company trades at 26.6 times earnings, which is higher than both the US Electronic industry average of 24.3x and its peer group, but still below its fair ratio of 32.2x. This gap means the market is not fully pricing in upside, yet also signals risk if earnings disappoint or industry multiples slip. Could these numbers be hinting at hidden caution, or is there opportunity beneath the surface?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Zebra Technologies Narrative

If you see the story differently or want to dive into your own analysis, you can easily craft a fresh perspective in just a few minutes with Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Zebra Technologies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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