Will Zebra Technologies Corporation's (NASDAQ:ZBRA) Earnings Grow In The Years Ahead?

The most recent earnings update Zebra Technologies Corporation's (NASDAQ:ZBRA) released in December 2018 confirmed that the business gained from a substantial tailwind, more than doubling its earnings from the prior year. Below, I've laid out key numbers on how market analysts view Zebra Technologies's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Zebra Technologies

Market analysts' prospects for the coming year seems positive, with earnings increasing by a robust 26%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting US$651m by 2022.

While it is helpful to be aware of the growth year by year relative to today’s level, it may be more beneficial evaluating the rate at which the company is growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Zebra Technologies's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 15%. This means, we can assume Zebra Technologies will grow its earnings by 15% every year for the next couple of years.

Next Steps:

For Zebra Technologies, there are three fundamental aspects you should further research:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is ZBRA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ZBRA is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ZBRA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.