Zebra Technologies ( ZBRA), which engages in the design, manufacture and distribution of specialty printing devices that print variable information on demand at the point of issuance, was initiated with a hold.

Even though the company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and revenue growth; we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation. Net income increased to $27.64 million from $26.72 million in the same quarter one year prior, an increase of 3.5%. The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Office Electronics industry average.

On an earnings per share basis, Zebra Technologies in the same quarter improved its EPS by 7.7% year over year. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, Zebra Technologies increased its bottom line by earning $1.60 a share compared with 98 cents the prior year. This year, the market expects the improvement in earnings to be $1.89 a share. The stock is off 24.13% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared with the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock. Zebra Technologies had been rated a buy since April 28, 2008.

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