Why Zebra Technologies Stock Lost 12% This Morning (Then Got Some of It Back)

Rich Smith, The Motley Fool
Updated
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In this article:

What happened

Shares of automatic identification and data capture (AIDC) company Zebra Technologies (NASDAQ: ZBRA) fell nearly 12% in early trading Thursday before reversing and clawing their way back to about a 6.8% loss as of 2:05 p.m. EDT.

You can blame investment research firm Northcoast for the decline -- and I suspect you can thank investment banker R.W. Baird for Zebra's comeback.

One hand holding money and one hand waiting to accept it.
One hand holding money and one hand waiting to accept it.

Image source: Getty Images.

So what

Early this morning, you see, Northcoast published a report reiterating support for Zebra stock -- but warning that sales were coming in slower than expected, spooking investors in the stock.

But just three hours later, R.W. Baird came out with a differing view. Its own AIDC survey, said Baird, shows that Zebra's sales in Q2 are looking likely to rise in the mid-single digits -- consistent with Zebra management's previous guidance (for 8% sales growth) and thus not a slowdown at all. Hearing this, investors quickly pared back their selling.

Now what

Zebra is set to report its Q2 results in just a few weeks, so it shouldn't be too long a wait to learn which of these analysts is making the better call on Zebra. One thing to look for when earnings do come out: Baird, in its note, warned that even with sales likely to grow, it's detecting some "hesitancy" and "distraction" among Zebra customers, possibly owing to concerns triggered by President Trump's trade war with China.

Assuming these concerns continue, we might see them reflected not in Zebra's actual results regarding Q2 but in its forecast for Q3 and beyond.

More From The Motley Fool

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Zebra Technologies. The Motley Fool has a disclosure policy.

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