Still Undervalued at 14x Our EPS Estimate With 16% EPS Growth in 2017
- The shares, off 24% from their June 2015 high of $119 despite EPS projected up 16% to a record $6.48 in 2017 and at least 11% in 2018 to $7.17, are trading at only 14x our 12-month forward EPS estimate.
- The operating margin is projected to improve to 17.1% in 2017 (from 15.2% in 2016 and 14.3% in 2015), aided by efficiencies gained from the transformative acquisition of Motorola’s Enterprise Solutions business (65% of sales), which should be fully integrated by mid-year 2017.
- Orders from Retail customers (Zebra’s most significant industry at around 33% of revenue) for mobile computers (38% of revenue) are now improving, driven by Zebra’s new products for both online customers as well as brick and mortar retailers, which are now spending to improve their online presence and inventory management.
Zebra Technologies designs, manufactures, and sells a range of automatic identification and data capture products, including: mobile computers, barcode scanners and imagers, radio frequency identification devices (RFID) readers, printers for barcode labeling and personal identification, real-time location systems, related accessories and supplies, such as labels and other consumables, and software utilities and applications. The company has two segments: Asset Intelligence and Tracking, which includes barcode and card printing, supplies, services, location solutions, and retail solutions; and Enterprise Visibility and Mobility, which includes mobile computing, data capture, RFID, and services.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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