Zebra Technologies Reports Record Q3 Revenue but Shares Fall on 2027 Margin Concerns
Zebra Technologies (ZBRA) reported record third-quarter revenue of $1.61 billion, a 22.3% year-over-year increase, and adjusted earnings per share of $4.95, both exceeding Wall Street estimates. The company also raised its full-year sales growth target to approximately 17%. Despite these strong top-line results, the stock experienced a significant pre-market selloff as investors reacted to projected margin compression in 2027. The primary driver of investor concern is rising memory chip costs, which created a $145 million headwind for the full year. While Zebra implemented a 15% price increase on mobile computers in October to offset these expenses, management warned that profitability margins are expected to be roughly 1.5 percentage points thinner in 2027 compared to 2026 levels. This margin squeeze is attributed to being a 'price-taker' in the memory market and facing customer friction regarding price hikes.
Tickers: $ZBRA
Topics: earnings beat guidance raise margin compression revenue growth