ZBRA - 5 Megatrends Driving Zebra Stock's Growth
Investors see considerable opportunity ahead for Zebra Technologies (NASDAQ: ZBRA) . In this clip from "3 Minute Stocks Updates" on Motley Fool Live , recorded on Feb. 16 , Motley Fool contributors Brian Withers and Toby Bordelon discuss why investors should be excited for Zebra's future and its $30 billion addressable market.
Brian Withers: Let's move onto Zebra, ZBRA. I'm not going to redo the quarterly highlights. There are some short-term headwinds with supply chain cost and issues, but I think that the company is super set up for the long term. There is a slide that it showed in the most recent earnings results, which talks about the market that it's in and the opportunities ahead. I want to share that one slide because I think it's really positive for investors. There's a lot going on here. The core business on the bottom left there, the lightest blue is enterprise mobile computing, data capture, thermal printing, etc., $10 billion to $12 billion market cap. This is the core market that the company is in today. The Zebra printers, the things that read them, the units that help you manage your inventory throughout your retail establishment or hospital or manufacturing business, that's growing long term. That's growing at a long-term growth rate of about 4% to 5%. In the adjacent one, the one in the middle, they talk about smart supplies, RFID tablets. These are existing products that it has on the market. It talked about having single-digit as a percentage of revenue. These adjacencies only make up a small portion of the revenue. That market is even bigger than the core market, and it's growing in the high single-digits. It's smaller and it's growing faster. The last piece, the expansion here, talks about machine vision, smart cameras, mobile robots, retail, and demand planning software. It's a bit smaller, $6 billion market cap, but that's growing at $6 billion and it's also in this market as well. This share of revenue is really not even measurable today. It's less than 1% of the company's total revenue. If you look at the megatrends there in the upper right-hand corner, cloud computing, intelligent automation, I'd also add labor shortages as really one of the things that's going to propel Zebra going forward in the future, making its customers and employees much more capable and being able to do more with less. Really excited about the future of Zebra in its $30 billion addressable market that it's got.
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5 Megatrends Driving Zebra Stock's Growth