Zebra Technologies Corporation reports 8.0% EBITDA decline in 2020 and 0.82% Revenue decline
02/11/2021 • About Zebra Technologies Corporation (
$ZBRA) • By InTwits
Zebra Technologies Corporation reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Zebra Technologies Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $1,523m in 2020, $328m in 2019, $62m in 2018, $108m in 2017, $72m in 2016
- In the last 5 years the company invested considerably less than D&A: $319m vs. $742m
- The company has highly profitable business model: ROIC is 20.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.5x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Zebra Technologies Corporation's Revenue decreased slightly on 0.82%. Annual revenue decline showed slowdown in 20Q4 - revenue increased on 9.7%. During the last 5 years Revenue growth topped in 2018 at 13.3% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.64 pp from 7.0% to 7.6% in 2020. During the last 5 years EBITDA Margin topped in 2019 at 20.2%.
Gross Margin decreased slightly on 1.8 pp from 46.8% to 45.0% in 2020. During the last 5 years Gross Margin topped in 2018 at 47.0% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.72 pp from 18.4% to 17.7% in 2020. SG&A as a % of Revenue followed a declining trend at -0.83 pp per annum in 2016-2020.
Net Income margin decreased slightly on 0.80 pp from 12.1% to 11.3% in 2020. Net Income margin followed a growing trend at 4.2 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.5% in 2020. The company's CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 1.5%.
Return on investment
The company operates at high and attractive ROE (25.3%) while ROIC is a bit lower (20.0%). ROIC decreased on 3.2 pp from 23.2% to 20.0% in 2020. ROE decreased on 9.0 pp from 34.3% to 25.3% in 2020. ROIC followed a growing trend at 4.9 pp per annum in 2016-2020. During the last 5 years ROE topped in 2018 at 38.8% and was declining since that time.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA decreased on 0.037x from 1.5x to 1.5x in 2020. Debt showed almost no change in 2020 while cash surged on 460%. Net Debt/EBITDA followed a declining trend at -1.2x per annum in 2016-2020.
Zebra Technologies Corporation has short term refinancing risk: cash is only 42.6% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 31.9x and P/E 50.2x.
Management team
The company's CEO is Anders Gustafsson. Anders Gustafsson has 13 years tenure with the company. The company's CFO is Nathan Andrew Winters. Nathan Andrew Winters has 2 months years tenure at the company.
Financial and operational results
FY ended 12/31/2020
Zebra Technologies Corporation ($ZBRA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 3,574 | 3,722 | 4,218 | 4,485 | 4,448 | -0.8% |
| Gross Profit | 1,642 | 1,710 | 1,981 | 2,100 | 2,003 | -4.6% |
| SG&A | 751 | 749 | 811 | 826 | 787 | -4.7% |
| EBITDA | 384 | 585 | 785 | 904 | 832 | -8.0% |
| EBIT | 80 | 322 | 610 | | | |
| Tax | 8 | 71 | 103 | | | |
| Net Income | -137 | 17 | 421 | 544 | 504 | -7.4% |
| Stock Based Compensation | 27 | 35 | 45 | | | |
Balance Sheet
|
|---|
| Cash | 156 | 62 | 44 | 30 | 168 | 460.0% |
| Accounts Receivable | 625 | 479 | 520 | | | |
| Inventory | 345 | 458 | 520 | | | |
| Accounts Payable | 413 | 383 | 552 | | | |
| Short Term Debt | 0 | 51 | 157 | 226 | 394 | 74.3% |
| Long Term Debt | 2,648 | 2,176 | 1,434 | 1,180 | 1,010 | -14.4% |
Cash flow
|
|---|
| Capex | 77 | 50 | 64 | 61 | 67 | 9.8% |
| Acquisitions | | | 72 | | | |
Ratios
|
|---|
| Revenue growth | -2.1% | 4.1% | 13.3% | 6.3% | -0.8% | |
| EBITDA growth | 7.6% | 52.3% | 34.2% | 15.2% | -8.0% | |
|
|---|
| Gross Margin | 45.9% | 45.9% | 47.0% | 46.8% | 45.0% | -1.8% |
| EBITDA Margin | 10.7% | 15.7% | 18.6% | 20.2% | 18.7% | -1.5% |
| EBIT Margin | 2.2% | 8.7% | 14.5% | | |
| SG&A, % of revenue | 21.0% | 20.1% | 19.2% | 18.4% | 17.7% | -0.7% |
| SBC, % of revenue | 0.8% | 0.9% | 1.1% | | |
| Net Income Margin | -3.8% | 0.5% | 10.0% | 12.1% | 11.3% | -0.8% |
| CAPEX, % of revenue | 2.2% | 1.3% | 1.5% | 1.4% | 1.5% | 0.1% |
|
|---|
| ROIC | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% | -3.2% |
| ROE | -16.3% | 2.1% | 38.8% | 34.3% | 25.3% | -9.0% |
| Net Debt/EBITDA | 6.5x | 3.7x | 2.0x | 1.5x | 1.5x | -0.0x |
People
|
|---|
| Insider ownership | 1.0% | 1.0% | 1.0% | | | |
| Employees | 6,500 | 7,000 | 7,400 | | | |
| Revenue/Employee, th. $ | 550 | 532 | 570 | | | |
Zebra Technologies Corporation ($ZBRA) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,052 | 956 | 1,132 | 1,308 | | -1.3% | -12.9% | 0.2% | 9.7% |
| EBITDA | 185 | 153 | 185 | 274 | | -14.0% | -29.5% | -22.6% | 17.6% |
| Net Income | 89 | 100 | 116 | 199 | | -22.6% | -19.4% | -14.7% | 17.8% |
Balance Sheet
|
|---|
| Cash | 24 | 63 | 39 | 168 | | -60.7% | 133.3% | 18.2% | 460.0% |
| Short Term Debt | 230 | 233 | 481 | 394 | | 42.9% | 23.9% | 102.1% | 74.3% |
| Long Term Debt | 1,262 | 1,091 | 1,196 | 1,010 | | -26.1% | -34.5% | -15.7% | -14.4% |
Ratios
|
|---|
| Gross Margin | 45.0% | 43.8% | 43.6% | 47.2% | | -2.0% | -3.6% | -3.8% | 1.6% |
| EBITDA Margin | 17.6% | 16.0% | 16.3% | 20.9% | | -2.6% | -3.8% | -4.8% | 1.4% |
| Net Income Margin | 8.5% | 10.5% | 10.2% | 15.2% | | -2.3% | -0.8% | -1.8% | 1.0% |
Peers in Electronic Equipment & Instruments
Below you can find Zebra Technologies Corporation benchmarking vs. other companies in Electronic Equipment & Instruments industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 5.0% | 10.4% | 4.4% | -3.5% |
|---|
| Zebra Technologies Corporation ($ZBRA) | - | 4.1% | 13.3% | 6.3% | -0.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 39.4% | 41.0% | 40.4% | 42.2% | 42.9% |
|---|
| Zebra Technologies Corporation ($ZBRA) | 45.9% | 45.9% | 47.0% | 46.8% | 45.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.0% | 8.7% |
|---|
| Zebra Technologies Corporation ($ZBRA) | 10.7% | 15.7% | 18.6% | 20.2% | 18.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.3% | 2.0% | 2.8% |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 1.3% | 1.5% | 1.4% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| NAPCO Security Technologies, Inc. ($NSSC) | - | - | - | 19.8% | 13.6% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 0.9% | 7.8% | 3.4% |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| |
|---|
| Median (16 companies) | -0.9x | -0.9x | -1.0x | 0.2x | 0.3x |
|---|
| Zebra Technologies Corporation ($ZBRA) | 6.5x | 3.7x | 2.0x | 1.5x | 1.5x |
