Analyst Note| William Kerwin |
We maintain our $449 fair value estimate for narrow-moat Zebra Technologies after it reported strong second-quarter results and maintained its full-year outlook. Zebra is ably navigating a plethora of macroeconomic headwinds, and we remain confident in its long-term fundamentals. The supply and logistics environment is improving, and despite pressure from a strong dollar, underlying demand looks stable. We posit that Zebra can be a long-term beneficiary of a transient tight supply environment as businesses look to modernize their logistics and supply chain and accelerate digital transformation. Shares dipped as much as 8% on below-consensus third-quarter guidance, but we focus on a positive outlook for the fourth quarter and an improving environment into 2023. Investors have an attractive entry point, in our view.