Fenimore Asset Management, Inc. on Zebra Technologies Corporation
Thesis
Zebra supplies warehouse and retail automation hardware. Quarterly organic revenue growth and earnings improvement were strong enough to support higher full-year guidance. Fenimore views these results as evidence of demand recovery as inventory destocking following the pandemic runs its course.
“demand for warehouse and retail automation hardware is reaccelerating as the post-pandemic inventory destocking cycle ends.”
Key risks
- Warehouse and retail automation orders may slow
- The end of destocking may not produce sustained growth
- High expectations after positive earnings could be missed