Critical Contrast: Zebra Technologies Corporation (ZBRA) versus Flextronics International (FLEX)

Zebra Technologies Corporation (NASDAQ: ZBRA) and Flextronics International (NASDAQ:FLEX) are both mid-cap industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility and Risk

Zebra Technologies Corporation has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500. Comparatively, Flextronics International has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Institutional & Insider Ownership

90.2% of Zebra Technologies Corporation shares are owned by institutional investors. Comparatively, 94.5% of Flextronics International shares are owned by institutional investors. 2.5% of Zebra Technologies Corporation shares are owned by company insiders. Comparatively, 0.8% of Flextronics International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Zebra Technologies Corporation and Flextronics International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zebra Technologies Corporation 0 4 5 0 2.56
Flextronics International 0 2 7 0 2.78

Zebra Technologies Corporation presently has a consensus target price of $101.17, indicating a potential downside of 11.51%. Flextronics International has a consensus target price of $19.50, indicating a potential upside of 6.73%. Given Flextronics International’s stronger consensus rating and higher probable upside, analysts plainly believe Flextronics International is more favorable than Zebra Technologies Corporation.

Earnings & Valuation

This table compares Zebra Technologies Corporation and Flextronics International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Zebra Technologies Corporation $3.57 billion 1.70 -$137.00 million ($0.79) -144.72
Flextronics International $23.86 billion 0.40 $319.56 million $1.01 18.09

Flextronics International has higher revenue and earnings than Zebra Technologies Corporation. Zebra Technologies Corporation is trading at a lower price-to-earnings ratio than Flextronics International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Zebra Technologies Corporation and Flextronics International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zebra Technologies Corporation -1.14% 38.88% 6.68%
Flextronics International 2.25% 22.71% 4.81%

Summary

Flextronics International beats Zebra Technologies Corporation on 8 of the 14 factors compared between the two stocks.

About Zebra Technologies Corporation

Zebra Technologies Corporation designs, manufactures and sells a range of automatic identification and data capture (AIDC) products. The Company’s AIDC products include mobile computers, barcode scanners, radio frequency identification (RFID) readers, wireless local area network (WLAN) products, specialty printers for barcode labeling and personal identification, real-time location systems (RTLS), related accessories and supplies, such as self-adhesive labels and other consumables, and utilities and application software. The Company operates through two segments: Enterprise, which comprises its mobile computing, data capture, RFID and WLAN products, and services, and Legacy Zebra, which comprises barcode and card printing, location solutions, supplies and services. The Company’s products are used in automatic identification (auto ID), data collection and personal identification applications.

About Flextronics International

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.

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