Why Zebra Technologies Corp. Stock Popped Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What:Shares of Zebra Technologies Corp. jumped 14% Wednesday after the company reported better-than-expected first-quarter results.

So what:Quarterly revenue rose 209.8% year over year to $893.2 million. For that, investors can primarily thank the $561.6 million top-line contribution from Zebra's Enterprise business, which it acquired from Motorola Solutions this past October.Even so, revenue from Zebra's legacy business rose a respectable 15% year over year to $331.6 million. That also translated to adjusted earnings before interest, taxes, depreciation and amortization of $152.2 million, and 44.7% growth in adjusted net income per diluted share to $1.39. Analysts, on average, were only expecting Zebra to report first-quarter revenue and earnings of $881.8 million and $1.12 per share, respectively.

In addition, for the current quarter Zebra anticipates revenue of $865 million to $895 million, adjusted EBITDA of $130 million to $145 million, and adjusted earnings of $1.00 to $1.25 per share. Based on the midpoint of those ranges, Wall Street was modeling slightly lower second-quarter revenue of $877 million, but with higher earnings of $1.17 per share.

Now what:Regardless of the outsized influence of Zebra's recently acquired Enterprise segment, there's no denying this was a strong report. With shares currently trading at a reasonable 15.7 times next year's expected earnings, I wouldn't be the least bit surprised if Zebra Technologies stock continues to reward patient investors going forward.

The article Why Zebra Technologies Corp. Stock Popped Today originally appeared on Fool.com.

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