Morgan Stanley Loves Zebra Technologies, Uses 'Dude, Where's My Car?' Reference

The somewhat once popular "Dude Where's My Car" catchphrase certainly isn't making a comeback, but it was referenced by analysts at Morgan Stanley in their initiation of Zebra Technologies Corp. (NASDAQ: ZBRA).

James Faucette of Morgan Stanley initiated coverage of Zebra with an Overweight rating and $115 price target as its customers need to add asset intelligence technology to processes or they will lose business.

"Dude, where's my inventory?," the analyst referenced.

"Across verticals, particularly retail, companies are being challenged by more efficient competitors," Faucette wrote. "As a result, companies need to incorporate intelligence into business processes or face revenue and margin pressures."

Faucette said asset intelligence technologies allows companies the ability to know real-time location, motion, and state of assets, people and transactions. As such, they are in a position to more efficiently allocate capital and inventory.

Faucette further noted that Zebra is one of the only companies that offer a full suite of asset intelligence solutions which should help it outgrow the market as customers invest in various solutions. As such, the company should be able to achieve its 4 to 5 percent growth targets, especially through acquisitions that further boast its leading position.

Bottom line, Faucette is positive on Zebra's opportunity for market growth despite the stock's gains over the past year. However, the analyst stated that the second-quarter print created a "dislocation" that creates a buying opportunity as the company's "disappointing" and weak margins should subside in the coming quarters.