![]() ![]() ![]() Alternatively, email editorial-team (at) Steele - Vice President of Investor Relations Have feedback on this article? Concerned about the content? Get in touch with us directly. Simply Wall St has no position in any stocks mentioned. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. We aim to bring you long-term focused analysis driven by fundamental data. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. This article by Simply Wall St is general in nature. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. This of course has caused the company to see substantial growth in its earnings. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. On the whole, we feel that Zebra Technologies' performance has been quite good. Is Zebra Technologies Efficiently Re-investing Its Profits? Summary So, the substantial 55% net income growth seen by Zebra Technologies over the past five years isn't overly surprising. Additionally, the company's ROE is higher compared to the industry average of 14% which is quite remarkable. A Side By Side comparison of Zebra Technologies' Earnings Growth And 29% ROEįirstly, we acknowledge that Zebra Technologies has a significantly high ROE. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. So far, we've learned that ROE is a measure of a company's profitability. What Has ROE Got To Do With Earnings Growth? One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.29 in profit. The 'return' is the profit over the last twelve months. So, based on the above formula, the ROE for Zebra Technologies is:Ģ9% = US$762m ÷ US$2.6b (Based on the trailing twelve months to July 2021). Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity ROE can be calculated by using the formula: ![]() View our latest analysis for Zebra Technologies How To Calculate Return On Equity? In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Particularly, we will be paying attention to Zebra Technologies' ROE today. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Zebra Technologies (NASDAQ:ZBRA) has had a great run on the share market with its stock up by a significant 18% over the last three months. ![]()
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