Ariel Investments, LLC — Ariel Small/Mid Cap Value Composite on Zebra Technologies Corporation
Thesis
Zebra delivered strong results and raised annual guidance as revenue accelerated across markets and geographies. Management offset memory supply constraints through pricing and execution, producing better margins and earnings than expected. Ariel sees durable demand for barcode systems, automation, digital workflows and supply-chain modernization. Repurchases and better fundamentals offer a route to continued earnings growth.
“component availability, rather than end-market weakness, serving as the primary constraint on growth.”
Key risks
- Memory and component supply constraints can continue to limit shipments despite healthy demand.
- Higher financing costs and economic uncertainty can weigh on customers’ automation spending.