What Happened?
Shares of enterprise data capture company Zebra Technologies (NASDAQ: ZBRA) jumped 4.5% in the afternoon session after the company announced it completed its acquisition of Elo Touch Solutions.
Management reported that the deal would expand Zebra's potential market by approximately $8 billion. The acquisition was expected to boost the company's focus on customer-facing processes in markets such as retail, hospitality, healthcare, and industrial automation. Elo Touch Solutions was an innovator in tools that engaged customers and improved self-service. The move came amid robust demand for automation and real-time workflow solutions, fueled by the expansion of e-commerce and increased supply chain demands.
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What Is The Market Telling Us
Zebra’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 2.9% on the news that the Consumer Price Index (CPI) report bolstered expectations for a Federal Reserve interest rate cut despite showing persistent inflation. The August CPI data, a key measure of inflation, showed prices rose 2.9% annually, slightly more than economists expected. While inflation remains above the Federal Reserve's 2% target, investors were focusing on other signs of a cooling economy, particularly a weakening labor market. As a result, the market widely anticipated that the Fed would cut interest rates at its September meeting to support the economy. Investors priced in multiple rate cuts by year-end, which boosted market sentiment and sent Treasury yields lower.
Zebra is down 19% since the beginning of the year, and at $310.67 per share, it is trading 26.2% below its 52-week high of $421.11 from January 2025. Investors who bought $1,000 worth of Zebra’s shares 5 years ago would now be looking at an investment worth $1,159.
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