GET DAILY SIGNALSZebra Technologies (ZBRA) Delivers Record Q3 Sales Growth of +22.3%
Key Takeaways
- Zebra posted record third-quarter net sales of $1,614 million, up 22.3% year over year and 11.3% on an organic basis.
- Non-GAAP diluted earnings per share (EPS) reached $4.95, up 27.6% from the prior-year period.
- Adjusted gross margin declined 220 basis points to 46.0% as rising memory component costs pressured profitability.
- Management raised its full-year outlook to roughly 17% sales growth and non-GAAP diluted EPS of about $21.20.
- Free cash flow reached $661 million year to date, with full-year free cash flow expected to be at least $1 billion.
Earnings Context and Why It Matters
Zebra Technologies, a leader in enterprise mobile computing, barcode printing, and RFID solutions, finds itself at the heart of efforts to digitize and automate frontline operations. This third-quarter report stood out because it showed whether ZBRA could maintain double-digit growth while absorbing a sharp rise in memory component costs. Following several quarters of broad-based demand across retail, transportation and logistics, manufacturing, and healthcare, the results highlighted both the strength of customer demand and the near-term cost pressures affecting gross margin.
Reported Results
Zebra reported net sales of $1,614 million for the third quarter ended October 3, 2026, a 22.3% increase from $1,320 million a year earlier. Organic net sales rose 11.3%. Non-GAAP diluted EPS came in at $4.95, up 27.6% year over year, while GAAP net income was $164 million, or $3.43 per diluted share. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted EBITDA increased to $349 million, with its margin holding steady at 21.6%. Adjusted gross margin fell 220 basis points to 46.0%, driven mainly by higher memory costs and business mix, partially offset by favorable foreign currency. The Connected Frontline segment grew 15% organically, supported by mobile computing and the Elo Touch acquisition, while Asset Visibility & Automation rose 7% organically on machine vision, printing, and RFID demand.
ZBRA exceeded its own guidance on both the top and bottom lines and slightly beat consensus estimates, though the memory cost headwind—now expected at roughly $145 million for the full year—remains the key concern.
Market Reaction and Investor Sentiment
Despite beating estimates and raising guidance, ZBRA shares fell sharply after the report. The stock dropped roughly 7.65% to around $333.52 in early trading, with some premarket indications pointing to declines near 12%. The reaction indicated that investors focused more on margin durability than on record revenue. The 220-basis-point decline in adjusted gross margin, along with management’s note that pricing actions had offset only about half of the quarterly memory cost increase, raised concerns that cost inflation could continue to outpace price realization. This created a classic “sell-the-news” response despite otherwise solid fundamentals.
Forward Outlook and Key Factors to Monitor
Zebra raised its full-year outlook, now expecting approximately 17% sales growth and non-GAAP diluted EPS of about $21.20 at the midpoint of its fourth-quarter guidance. For the fourth quarter, management guided to sales growth of 10% to 14%, an adjusted EBITDA margin of approximately 22%, and non-GAAP diluted EPS in the range of $5.00 to $5.40.
The most important variable remains memory component pricing. Management expects costs to keep rising through the first half of 2027 before moderating and has implemented a roughly 15% price increase on mobile computing products to help offset the pressure. Investors should track whether price realization keeps pace with costs and whether efforts to qualify additional memory suppliers improve supply resilience.
Beyond costs, demand signals across end markets deserve attention, particularly the multiyear transportation and logistics refresh cycle expected to begin in 2027. Early adoption of frontline AI offerings and continued integration of the Elo Touch acquisition are additional catalysts. Free cash flow, targeted at $1 billion or more for the year, will also indicate the company’s ability to fund buybacks and potential acquisitions while managing elevated inventory tied to memory stocking.
Exploring Tickeron's AI Screener
In my research on earnings like these, I often turn to Tickeron’s AI Screener to quickly filter stocks by technical patterns, fundamentals, and AI-driven signals. It helps surface relevant ideas and compare performance across industries more efficiently than manual methods, supporting a more systematic approach without replacing core analysis.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
ZBRA in -8.79% downward trend, sliding for three consecutive days on November 03, 2026
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where ZBRA declined for three days, in 221 of 305 cases, the price declined further within the following month. The odds of a continued downward trend are 72%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 38 of 55 cases where ZBRA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 69%.
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ZBRA as a result. In 62 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 70%.
The Moving Average Convergence Divergence Histogram (MACD) for ZBRA turned negative on October 14, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In 32 of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at 68%.
ZBRA moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for ZBRA's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
Following a +4.05% 3-day Advance, the price is estimated to grow further. Considering data from situations where ZBRA advanced for three days, in 202 of 309 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
ZBRA may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 106 of 158 cases where ZBRA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 67%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 35 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 41 (best 1 - 100 worst), indicating steady price growth. ZBRA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 55 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 65 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.538) is normal, around the industry mean (6.313). P/E Ratio (29.955) is within average values for comparable stocks, (4.917). Projected Growth (PEG Ratio) (0.626) is also within normal values, averaging (0.778). Dividend Yield (0.000) settles around the average of (0.110) among similar stocks. P/S Ratio (2.910) is also within normal values, averaging (11.937).
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZBRA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
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General Information
a laser printing developer
Industry TelecommunicationsEquipment
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