PomegraZebra Technologies Stock Falls 10% as Memory Costs Hit Margins
Why is Zebra Technologies stock down today?
Zebra Technologies (ZBRA) stock fell about 10% to $325 on Tuesday after higher memory costs cut its gross margin to 46%, even though third-quarter sales and profit beat estimates.
Key numbers
| Q3 sales | $1.61B+22.3% YoY |
|---|---|
| Non-GAAP EPS | $4.95+28% YoY; est. $4.89 |
| Adjusted gross margin | 46.0%-220 bps YoY |
| Share price | $325.04-10% vs $361.13 close |
| 2026 memory cost headwind | $145Mup from $120M (per [2]) |
| Q4 EPS outlook | $5.00-$5.40midpoint $5.20 vs $5.21 est. |
What happened
Zebra Technologies (ZBRA) stock fell about 10% to $325 on Tuesday after higher memory costs cut its gross margin to 46%, even though third-quarter sales and profit beat estimates. Sales rose 22.3% to $1.61 billion, and Zebra raised its 2026 sales growth forecast to about 17%. But gross margin, the share of each sale left after product costs, fell to 46% from 48.2% as memory chips cost more. Memory costs rose more than $50 million in the quarter, and price increases covered about half. Its fourth-quarter profit forecast midpoint, $5.20 a share, sat just below analysts' $5.21.
Why it matters
Zebra Technologies makes the scanners and handheld computers that warehouses and stores use every day, so its results show how well a widely used type of business hardware is selling. The drop shows investors are watching profit margins as closely as sales. Zebra now expects memory costs to be about $145 million this year, up from $120 million, and has raised prices on its mobile computers.
Who this affects
- MarketbearishLow impact
- Investors punished a beat; margin worries outweighed strong sales.
- CompanybearishMedium impact
- Shareholders lost about 10% as profit margins shrank.
- CompetitorsneutralLow impact
- Rivals buying memory chips could face similar cost pressure.
- IndustrymixedMedium impact
- Hardware makers face pricier memory, pushing them toward price increases.
Zebra Technologies vs Honeywell, Cognex
How we got here
Zebra raises 2026 outlook to 14%-16% sales growth after Q2 adjusted gross margin of 53.3%.
Zebra shares close at $361.13 ahead of third-quarter results.
Zebra reports Q3 sales of $1.61B and lifts 2026 growth outlook to about 17%.
Shares fall about 10% to $325.04 as gross margin slips to 46%.
What to watch
- Fourth-quarter outlook: sales growth of 10%-14%, adjusted EBITDA margin near 22%, EPS $5.00-$5.40.Q4 2026
- Whether the roughly 15% October mobile computer price increase offsets memory costs.Q4 2026
Educational content only. Not investment advice.
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