With EPS Growth And More, Zebra Technologies (NASDAQ: ZBRA) is interesting
For newbies, it might seem like a good idea (and an exciting prospect) to buy a business that tells investors a good story, even if it lacks a history of revenue and profit altogether. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.
If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in Zebra Technologies (NASDAQ: ZBRA). Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.
Check out our latest review for Zebra Technologies
Improved Zebra Technologies Profits
Over the past three years, Zebra Technologies has grown its earnings per share (EPS) like a young bamboo after the rain; fast, and from a low base. So I don’t think the percentage growth rate is particularly significant. So it makes sense to focus on more recent growth rates instead. Like a tailed eagle caught in the wind, Zebra Technologies’ EPS has gone from US $ 9.16 to US $ 14.27 in just one year. That’s an impressive 56% gain.
One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. Zebra Technologies shareholders can rely on the fact that EBIT margins have increased from 16% to 18% and revenue is increasing. It’s great to see, on both counts.
In the graph below, you can see how the business has increased its profit and revenue over time. For more details, click on the image.
The trick, as an investor, is to find companies that go to perform well in the future, not just in the past. To that end, now and today you can check out our visualization of consensus analysts’ forecasts for future Zebra Technologies EPS 100% free of charge.
Are Zebra Technologies Insiders Aligned with All Shareholders?
Since Zebra Technologies has a market cap of US $ 29 billion, we don’t expect insiders to own a significant percentage of stocks. But we are reassured by the fact that they are investors in the company. Indeed, they have invested a sparkling mountain of wealth, currently valued at US $ 161 million. I would find that kind of skin in the game quite encouraging, if I owned any stock, as it would ensure that the leaders of the company would also experience my success, or failure, with the action.
It means a lot to see insiders investing in the company, but I wonder if the compensation policies are shareholder friendly. A brief analysis of CEO compensation suggests they are. I found that the median total compensation of CEOs of companies like Zebra Technologies, with market caps above $ 8.0 billion, is around $ 11 million.
Zebra Technologies offered total compensation worth $ 10 million to its CEO during the year to. This is lower than the average for similar sized companies and seems pretty reasonable to me. CEO compensation isn’t the most important aspect of a business to consider, but when it’s reasonable, it gives me a little more confidence that executives are looking out for the interests of shareholders. I would also say that reasonable pay levels are a testament to good decision making more generally.
Is Zebra Technologies Worth Watching?
Given my belief that the stock price tracks earnings per share, you can easily imagine what I think of Zebra Technologies’ strong EPS growth. If that is not enough, also consider that the compensation of the CEO is quite reasonable and that the insiders are well invested alongside the other shareholders. Everyone has their own tastes, but I think all of this makes Zebra Technologies quite interesting. Before proceeding to the next step, you should know the 1 warning sign for Zebra Technologies that we discovered.
While Zebra Technologies certainly looks good to me, I would like more insiders to buy stocks. If you also like to see insider buying then this free list of growing companies that insiders are buying, might be exactly what you are looking for.
Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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