Zebra (ZBRA): Buy, Sell, or Hold Post Q3 Earnings?

Over the past six months, Zebra’s shares (currently trading at $262.62) have posted a disappointing 17.8% loss, well below the S&P 500’s 11.5% gain. This might have investors contemplating their next move.

Is there a buying opportunity in Zebra, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Zebra Not Exciting?

Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why ZBRA doesn't excite us and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Zebra’s 3.9% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the business services sector.

2. Slow Organic Growth Suggests Waning Demand In Core Business

We can better understand Specialized Technology companies by analyzing their organic revenue. This metric gives visibility into Zebra’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Zebra’s organic revenue averaged 4.4% year-on-year growth. This performance slightly lagged the sector and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations.

3. Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Zebra’s margin dropped by 7 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Zebra’s free cash flow margin for the trailing 12 months was 15.1%.

Final Judgment

Zebra’s business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 15.2× forward P/E (or $262.62 per share). Beauty is in the eye of the beholder, but our analysis shows the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment. We’d recommend looking at the Amazon and PayPal of Latin America.

Stocks We Would Buy Instead of Zebra

Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.