There are many ways to play the growth in e-commerce, from platforms like Amazon and Shopify to payments companies like Lightspeed and PayPal and from logistics companies like Kinaxis to shippers like UPS. How about a different angle?
Zebra Technologies (Zebra Technologies Stock Quote, Charts, News, Analysts, Financials NASDAQ:ZBRA) is a printing company specializing in automatic identification and data capture technology. They make, for instance, RFID codes to ship and track packages but they also do hardware like handheld devices and robotics and software that incorporates AI and machine learning to help with automation and imaging.
The stock fell with the rest of the tech market in late 2021, going from $600 to half that in short order and has bumped around the $250-$350 range for the past year.
But portfolio manager Paul Harris thinks investors will do well by Zebra, since it’s got a good grip on its piece of the e-commerce pie.
“We like the story because we think e-commerce is going to continue to grow. They’re a major player in that and there aren’t that many people that participate in their field with them,” said Harris of Harris Douglas Asset Management, who spoke on a BNN Bloomberg segment on Tuesday.
“They grew very rapidly through the COVID period and then now they’re digesting all that growth, like you’ve seen with a lot of other tech companies. But we think it’s a good time to own the stock here,” he said.
Sales were up just 2.7 per cent to $5.781 billion for Zebra’s 2022 year, which compared to the huge 26.5 per cent leap the company made between 2021’s revenue and 2022. Earnings actually declined last year on a year-over-year basis, going from adjusted EBITDA of $1.297 billion in 2021 to $1.235 billion in 2022.
And management has been cautious in its outlook for the current year, saying the macro environment remains uncertain.
“We are recovering from supply chain challenges and achieved sales and earnings performance at the high end of our outlook, driven by double-digit growth in the Americas,” said CEO Anders Gustafsson in a February press release.
But for Harris, the longer-term picture is still sharp for Zebra.
“We don’t see this company going away and we think e-commerce will continue to be a very strong part of the of the economy over the next several years. And this company will benefit from that as we really do need their products because a lot of it is about logistics,” he said.
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