As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the specialized technology industry, including Zebra (NASDAQ: ZBRA) and its peers.

Companies in this sector, especially if they invest wisely, could see demand tailwinds as the world moves towards more IoT (Internet of Things), automation, and analytics. Enterprises across most industries will balk at taking these journeys solo and will enlist companies with expertise and scale in these areas. However, headwinds could include rising competition from larger technology firms, as digitization lowers barriers to entry in the space. Additionally, companies in the space will likely face evolving regulatory scrutiny over data privacy, particularly for surveillance and security technologies. This could make companies have to continually pivot and invest.

The 8 specialized technology stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1% while next quarter’s revenue guidance was 1.5% below.

Thankfully, share prices of the companies have been resilient as they are up 6.1% on average since the latest earnings results.

Zebra (NASDAQ: ZBRA)

Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.

Zebra reported revenues of $1.29 billion, up 6.2% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with a solid beat of analysts’ full-year EPS guidance estimates.

“Solid demand, excellent execution by our team and lower-than-expected tariffs enabled us to deliver second quarter results that exceeded our expectations," said Bill Burns, Chief Executive Officer of Zebra Technologies.

Zebra delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 17.6% since reporting and currently trades at $282.

Is now the time to buy Zebra? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Napco (NASDAQ: NSSC)

Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.

Napco reported revenues of $50.72 million, flat year on year, outperforming analysts’ expectations by 14.1%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.

Napco scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 34.4% since reporting. It currently trades at $42.60.

Is now the time to buy Napco? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q2: PAR Technology (NYSE: PAR)

Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE: PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.

PAR Technology reported revenues of $112.4 million, up 43.8% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a slower quarter as it posted a significant miss of analysts’ ARR estimates.

As expected, the stock is down 37.9% since the results and currently trades at $36.

Read our full analysis of PAR Technology’s results here.

Mirion (NYSE: MIR)

With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.

Mirion reported revenues of $222.9 million, up 7.6% year on year. This number surpassed analysts’ expectations by 3.1%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ revenue estimates and EPS in line with analysts’ estimates.

The stock is up 9.4% since reporting and currently trades at $24.42.

Read our full, actionable report on Mirion here, it’s free for active Edge members.

Arlo Technologies (NYSE: ARLO)

Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE: ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.

Arlo Technologies reported revenues of $129.4 million, up 1.5% year on year. This result topped analysts’ expectations by 4.8%. It was a very strong quarter as it also logged a solid beat of analysts’ revenue estimates and revenue guidance for next quarter exceeding analysts’ expectations.

The stock is up 2.7% since reporting and currently trades at $16.89.

Read our full, actionable report on Arlo Technologies here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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