![]() 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. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. Unsurprisingly, this has led to an impressive earnings growth. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. On the whole, we feel that Zebra Technologies' performance has been quite good. Given that Zebra Technologies doesn't pay any dividend to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business. Is Zebra Technologies Efficiently Re-investing Its Profits? Such as - high earnings retention or an efficient management in place. We reckon that there could also be other factors at play here. This certainly adds some context to Zebra Technologies' exceptional 34% net income growth seen over the past five years. Further, the company's ROE compares quite favorably to the industry average of 14%. To begin with, Zebra Technologies seems to have a respectable ROE. ![]() Zebra Technologies' Earnings Growth And 20% ROE Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Why Is ROE Important For Earnings Growth? That means that for every $1 worth of shareholders' equity, the company generated $0.20 in profit. The 'return' is the amount earned after tax over the last twelve months. So, based on the above formula, the ROE for Zebra Technologies is:Ģ0% = US$497m ÷ US$2.5b (Based on the trailing twelve months to July 2022). ![]() Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity Simply put, it is used to assess the profitability of a company in relation to its equity capital.Ĭheck out our latest analysis for Zebra Technologies How Is ROE Calculated? Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Particularly, we will be paying attention to Zebra Technologies' ROE today. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. However, a closer look at its sound financials might cause you to think again. With its stock down 11% over the past month, it is easy to disregard Zebra Technologies (NASDAQ:ZBRA).
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