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Zebra Technologies Corporation (ZBRA) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Zebra Technologies Corporation (ZBRA)

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Intrinsic Value (DCF)

Current$258.85
→
Intrinsic$317.82
+23%
$208.48$317.82$525.66
Market implies 4% growth for 5 years
ZBRA shows 23% potential upside using 9% growth — reasonable if fundamentals hold.
At $259, the market prices in only 4% growth — below historical 9%, suggesting low expectations.
Range: Bear $208 → Bull $526. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →5%7%9%11%
8%$383$420$460$503
10%$265$290$318$347
12%$199$218$239$261
14%$157$172$189$206

Bull Case

  • Bull case ($526) offers 103% upside at 11% growth, 9% discount
  • 19% margin of safety vs. base case estimate
  • Market-implied growth (4%) ≤ historical CAGR (9%)

Bear Case

  • Bear case ($208) implies 19% downside at 7% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.04B
Year 2$1.13B
Year 3$1.23B
Year 4$1.34B
Year 5$1.46B
Terminal$21.46B

📐 Model Inputs

Growth Rate8.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$954.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ZBRA stock undervalued or overvalued?
🟢 UNDERVALUED

ZBRA trades at $258.85 vs. our DCF-derived intrinsic value of $317.82, implying +23% upside. At a 10.0% WACC and 8.9% projected FCF growth, the market appears to be underpricing the present value of ZBRA's future cash flows. The bear case ($220.55) still suggests upside, providing margin of safety.

What is ZBRA's intrinsic value?

Using a 5-year DCF model: Base FCF of $954M, projected at 8.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.46B net debt and dividing by 0.05B shares: Bear $220.55 | Base $317.82 | Bull $448.93. Current price $258.85 implies +23% to base case.

How is ZBRA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($17.95B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.8x.