Zebra Technologies shares have risen for six consecutive months since the company sold its robotics automation business in April, gaining about 58%. The stock broke above the $386.23 pivot in a cup-with-handle pattern on October 6 and has since traded near that level. With third-quarter results due next week, investors will be watching to see whether earnings support the rally.
Shares advanced after the robotics sale
Zebra Technologies (NASDAQ: ZBRA), long known for its industrial products, has also drawn attention as an artificial intelligence-related stock. In April, the company announced the sale of its robotics automation business to Skild AI. It has since focused more on radio-frequency identification (RFID), machine vision and AI products, while its shares continued to climb.
The stock has moved above the $386.23 level and recently traded close to it. Its relative strength line is also trending upward, indicating that the shares have outperformed the S&P 500. Chart analysis describes the current pattern as an early “base-on-base” formation. Still, with the stock back near a key level ahead of earnings, the market’s reaction to the results remains in focus.
Second-quarter results lifted the stock
Zebra’s second-quarter performance helped support the share price. The company reported earnings of $6.35 per share, above analysts’ forecast of $4.36, and revenue of $1.6 billion, slightly ahead of the $1.5 billion expected. The stock rose 26% after the results were released.
Third-quarter results are expected next week. Wall Street currently forecasts earnings of $4.89 per share and revenue of $1.6 billion. Compared with the second quarter, the earnings estimate is lower while the revenue forecast is broadly unchanged, making the reported figures and the company’s comments on its business important points for investors.
Products serve retail, logistics and healthcare
Zebra sells thermal printers, barcode scanners, handheld and wearable computers, scanning equipment and task-management software. Its customers span retail, manufacturing, transportation, logistics and healthcare. The company says its AI portfolio can help optimize workflows and simplify business processes.
On October 1, Zebra completed its acquisition of Elo Touch Solutions, adding self-service kiosk and payment capabilities. Elo devices are used to improve point-of-sale (POS) and self-checkout processes. The robotics divestiture, changes to the product mix and the addition of payment-related products are key parts of the company’s recent business shifts. Next week’s third-quarter report will give investors fresh data to assess its operating performance.