Zebra Technologies Corporation (ZBRA)

Conclusion

Zebra Technologies designs and sells printers, barcode scanners, RFID systems and rugged mobile computers, supported by maintenance, repair and managed services. At a price of 326.71 USD on 9 November 2026, the market capitalisation is 15.38 billion USD.

The verdict is fair. The fair value band runs from 237.25 to 355.88 USD with a midpoint of 296.56 USD, giving a margin of safety of -9.2% at the current price. Today's multiples sit below their own ten-year medians: P/E of 25.6 against a median of 33.5, EV/EBITDA of 16.0 against 19.5, and P/B of 4.3 against 6.7. The DCF gives 182.22 USD per share at a discount rate of 13.1%, while the fair value from historical multiples is 410.91 USD. The reverse DCF implies growth of 12.4% a year, against revenue growth of 3.9% a year over five years and free cash flow per share growth of -0.5% a year.

The strongest supports are free cash flow conversion of 164.1% on a trailing twelve-month basis, an Altman Z-score of 3.47, and a share count that fell 1.0% a year over five years. The weakest numbers are a current ratio of 0.57, a return on invested capital of 10.9% against a cost of capital of 11.7%, and earnings per share falling 2.6% a year over five years.

Financial health

Financial strength is yellow, held up by a safe Altman Z-score of 3.47 and pulled down by a current ratio of 0.57 and a quick ratio of 0.30. Net debt is 2.28 times EBITDA, debt to equity is 0.77, and interest coverage is 6.19. The Altman model was designed for manufacturers; Zebra makes hardware, so the zone is a reasonable guide, and the score places the company in the safe zone. Insolvency risk: low, about 0.9% by the estimate of the Ohlson model over one to two years. The company's cash and short-term liabilities are the area to watch, since the current ratio is well below 1.

Earnings quality

Earnings quality is green, supported by free cash flow conversion of 164.1% on a trailing twelve-month basis and 122.6% over five years. The accrual ratio is -6.05%, meaning cash generation exceeds reported profit. Stock-based compensation is 2.75% of revenue, and free cash flow after it is 819 million USD. The share count fell 1.0% a year over five years, which points to buybacks. The Piotroski score is 5 of 9. The Beneish M-score is not available. Zebra beat earnings estimates in 6 of the last 8 quarters, with an average surprise of 11.8%. Next year's earnings estimates rose 7.6% over the last 90 days, with six upward revisions and none downward.

Profitability

Profitability is green. The gross margin is 48.3% against a ten-year median of 46.1%, the operating margin is 16.2% against 14.6%, and the net margin is 9.8% against 9.0%. Operating margin has been stable, with a stability measure of 35.4%. The central weakness is return on invested capital of 10.9% against a weighted cost of capital of 11.7%, giving a difference of -0.8%, a neutral reading. The five-year median return on invested capital is 11.3%. Return on equity is 16.9%, but the DuPont split shows that leverage contributes: net margin of 7.8%, asset turnover of 0.63x and an equity multiplier of 2.37x.

Growth

Growth is yellow. Revenue compound growth is -2.3% over three years, 3.9% over five years and 4.0% over ten years. Earnings per share fell 2.4% a year over three years and 2.6% a year over five years. Free cash flow per share grew 27.3% a year over three years but fell 0.5% a year over five years. Revenue grew in 7 of the last 10 years. Analysts expect earnings growth of 5.6% next year, which is a modest recovery from recent declines.

Valuation

Valuation is yellow, with a fair verdict and a margin of safety of -9.2%. Multiples sit below their ten-year medians: P/E is 25.55 against 33.51, a premium of -23.7%; EV/EBITDA is 16.00 against 19.54, a premium of -18.1%; price to free cash flow is 15.57 against 17.59, a premium of -11.5%; price to sales is 2.51 against 2.94, a premium of -14.7%; price to book is 4.31 against 6.67, a premium of -35.3%. The DCF gives 182.22 USD per share at a discount rate of 13.06%, with 38.4% of its value in the terminal period. The fair value from historical multiples is 410.91 USD. The reverse DCF implies growth of 12.4% a year, against 3.9% delivered in revenue. The company pays no dividend, and the free cash flow yield is 6.4%.

Risks

A current ratio of 0.57 means short-term obligations exceed liquid assets, so any cash squeeze or delay in collecting receivables would tighten the balance sheet quickly. Net debt of 2.28 times EBITDA and interest coverage of 6.19 leave limited room if earnings fall. A return on invested capital below the cost of capital means that growth adds little value unless margins or capital efficiency improve. Five years of falling earnings per share would make the price hard to justify if the expected recovery does not come. The DCF rests on a discount rate of 13.06% and a long-term growth rate of 2.5%; small changes in either move the result sharply. The Beneish M-score is not available. This analysis has no debt maturity schedule and no revenue split by segment, so it cannot show when debt falls due or which product lines drive growth.