Factors Behind Zebra Technologies' (ZBRA) Weakness
RS Investments, an investment management company, released its 'RS Large Cap Value Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy underperformed its benchmark, the Russell 1000 Value Index (the 'Index'), and returned 1.57% (net) versus a return of 2.14% for the Index. The strong performance from stock selection in Consumer Discretionary and Utilities aided relative performance in the quarter, while stock selection in Materials and Information Technology detracted. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, RS Large Cap Value Strategy highlighted stocks such as Zebra Technologies Corporation (NASDAQ:ZBRA). Zebra Technologies Corporation (NASDAQ:ZBRA) offers enterprise asset intelligence solutions in the automatic identification and data capture solutions industry. The one-month return of Zebra Technologies Corporation (NASDAQ:ZBRA) was 18.14%, and its shares lost 11.02% of their value over the last 52 weeks. On May 22, 2025, Zebra Technologies Corporation (NASDAQ:ZBRA) stock closed at $288.36 per share with a market capitalization of $14.664 billion.
RS Large Cap Value Strategy stated the following regarding Zebra Technologies Corporation (NASDAQ:ZBRA) in its Q1 2025 investor letter:
"Zebra Technologies Corporation (NASDAQ:ZBRA), a provider of physical asset tracking software and hardware, declined 26% during the quarter. Our long term thesis is that manufacturing, retail, distribution, and healthcare companies will invest in automation and tracking technologies to improve efficiency, margins, and customer satisfaction. Long before we purchased the stock, it slumped in 2022 after excessive purchases from online retailers and distribution centers during Covid. We eventually initiated a position in August 2023 after we identified that the Covid purchases had been worked through. The stock then performed well in 2024 as our thesis played out. However, in early 2025, management provided conservative guidance due to concerns about tariffs and consumer spending. While these political and macro concerns will produce some headwinds, our long-term thesis remains intact, so we continue to hold our position."
A tech-savvy employee testing a real-time location system in a warehouse.
Zebra Technologies Corporation (NASDAQ:ZBRA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Zebra Technologies Corporation (NASDAQ:ZBRA) at the end of the fourth quarter compared to 42 in the third quarter. Zebra Technologies Corporation's (NASDAQ:ZBRA) Q1 2025 revenue grew 12% year-over-year to $1.31 billion. While we acknowledge the potential of Zebra Technologies Corporation (NASDAQ:ZBRA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Zebra Technologies Corporation (NASDAQ:ZBRA) and shared the list of worst performing stocks in the S&P 500 so far in 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
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