Second verse, same as the first.
One week ago today, shares of automatic identification and data capture (AIDC) specialist Zebra Technologies (NASDAQ: ZBRA) dropped 7% in response to an analyst report suggesting that sales were coming in slower than expected in Q2.
One week later, a different analyst, Wellington Shields, is cutting its estimates for Zebra as well, and downgrading the stock to a hold. Shares sold off by more than 10% in response earlier today, and while they have recouped some of those losses, they were still down 7.3% as of 2:55 p.m. EDT.
Image source: Getty Images.
So exactly how bad does Wellington Shields expect Zebra to do in Q2, since it is convinced a downgrade is necessary? Neither TheFly.com nor StreetInsider.com, two sources for analyst commentary, had any specific information about why Wellington is worried, only reciting the fact that the downgrade happened. Yet investors are selling the stock anyway.
Selling a stock without demanding specifics beforehand is not a logical response. Then again, with Zebra stock costing a rich 23 times earnings, and pegged for only 10% long-term earnings growth on Yahoo! Finance, perhaps investors aren't really inclined to give Zebra the benefit of the doubt. With the stock still up 33% over the past year, they may be thinking now is a time to take some chips off the table and reevaluate after earnings.
In which case, they won't have long to wait: Zebra reports Q2 results on July 30.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own)
- What Is an ETF?
- 5 Recession-Proof Stocks
- How to Beat the Market