Zebra Technologies (ZBRA) is the IBD 50 Stocks To Watch pick for Wednesday as it eyes a new buy point amid a profits turnaround. The stock has trotted as high as 244% above its 2020 lows.
Zebra Technologies designs, manufactures and sells automatic identification and data capture products. These include mobile computers, bar code scanners and radio frequency identification devices readers.
The firm, which serves transportation, logistics, government and education enterprises, operates through two segments. The first is Asset Intelligence & Tracking, whose operations include bar code and card printing and location solutions. The other is Enterprise Visibility & Mobility, which focuses on areas including mobile computing and data capture.
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Stocks To Watch: ZBRA Analysis
Zebra Technologies stock has formed a new flat base, according to MarketSmith analysis. It is now cantering toward an ideal buy point of 516.88.
The flat base is one of the most reliable patterns formed by top growth stocks form before they embark on big price advances. This is a second-stage base, and such early stage patterns are also more likely to succeed, according to IBD research.
The relative strength line is showing signs of life, however it has yet to advance sharply. It has stabilized after declining from late February until early March. This gauges a stock’s performance compared to the broader S&P 500 index.
ZBRA stock has a strong IBD Composite Rating of 92. This puts it in the top 8% of stocks tracked. It boasts a solid mix of earnings and price performance.
IBD Stock Checkup shows earnings have been flat over the past three quarters. However closer examination shows an EPS turnaround is underway. Earnings grew 25% in the most recent quarter, after three straight quarters of EPS declines. Earnings have also accelerated for the past two quarters.
Analyst Rates Zebra Stock A Buy
UBS analyst Damian Karas is rating Zebra Technologies stock as a buy with a 540 target. He touted Android share gains, software total addressable expansion and the firm’s focus on investment as reasons for enthusiasm.
“Strong fourth quarter results reinforced our bullish view. ZBRA is uniquely positioned as a global leader in its (roughly) $25 billion market with both cycle momentum and tailwinds,” he said in a research note. “Sales accelerated exiting 2020 (+8% organically) with orders since (then) gaining further momentum, with 1Q up (around) 22%-25%. (Fiscal) 2021 guide could prove conservative, with capital deployment also representing upside to EPS.”
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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