Zebra Technologies Corporation

ZBRA · NASDAQ · USD

Can Zebra keep raising prices to fully offset memory cost inflation while memory supply, not customer demand, sets how much product it can ship?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Memory cost pass-through

    The bull case is that Zebra can keep raising prices to cover component inflation, so memory cost increases pressure competitors' margins rather than its own.

  • Broad-based end market demand

    Demand is spread across retail, manufacturing, healthcare and logistics, so no single end market has to carry the year and customers keep spending on hardware.

  • Machine vision and RFID

    Machine vision has returned to growth and RFID adoption keeps widening beyond apparel, adding faster-growing products to a hardware business that grows slowly on its own.

  • Frontline AI and Elo portfolio

    Acquisitions and the Frontline AI suite widen what Zebra sells into each customer, giving it more ways to grow than device replacement cycles alone.

Bear case

  • Memory supply limits shipments

    The bear case is that demand is not the constraint, memory supply is, so revenue and margins depend on allocations from chipmakers that Zebra does not control.

  • Large refresh cycles deferred

    Large logistics and retail refresh projects keep moving to later years, leaving growth to come from smaller run-rate orders that are harder to forecast.

  • Acquisition-dependent growth

    Much of the reported growth comes from acquisitions and currency rather than existing operations, so the underlying business is expanding far more slowly.

  • Cyclical capital spending

    Sales fell sharply in past downturns when customers postponed capital spending, and a similar pause would hit revenue and margins again.

Bull and bear points

Growth & Execution

In short: Demand is broad and guidance keeps rising, while memory supply limits how much of that demand can be shipped.

Bull · 2

  • Full-year sales guidance raised at each of the last two reports

    A quarter ago management guided to 10% to 14% sales growth for the year; it now guides to 14% to 16%, citing a strong backlog, a firming manufacturing market and momentum in machine vision.

    Tone shiftQ1 FY2026 → Q2 FY2026

  • Machine vision swung from decline to double-digit growth

    A year ago management said machine vision declined in the quarter; it now reports double-digit growth and expects that to continue for the full year as manufacturing recovers and logistics wins land.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • Memory supply, not demand, caps how much Zebra can ship

    Management says customer demand sits near the high end of its sales range but guides to the midpoint because it cannot be certain of second-half memory allocations.

    Q2 FY2026 call

  • Large logistics refresh deployments now start in 2027

    Management previously assumed the same large-order activity as the prior year; it now frames logistics refreshes as a multiyear pipeline beginning next year, so this year's growth has to come from elsewhere.

    Tone shiftQ4 FY2025 → Q2 FY2026

Profitability & Financial Strength

In short: Margins expanded sharply on pricing and productivity, while memory costs keep stepping up through the year.

Bull · 2

  • Price increases now cover roughly three quarters of the memory headwind

    Management raised its expected pricing benefit to about $90 million against a $120 million memory cost increase, and gross margin reached 53% in the second quarter.

    Q2 FY2026 call

  • Free cash flow funds a larger buyback at modest leverage

    Free cash flow was $904 million over the last twelve months and management targets at least $1 billion this year, funding $568 million of repurchases in the first half while leverage stayed near 1.9 times.

    Q2 FY2026 call
Bear · 1

  • Memory costs step up again in the third quarter

    Management expects about a point of margin degradation from higher memory costs in the third quarter, and the full-year margin target depends on further price increases landing as planned.

    Q2 FY2026 call

Market Position

In short: Zebra leads in RFID readers and mobile computers, but sales depend on customers' capital spending cycles.

Bull · 1

  • Zebra holds the leading share in RFID readers and printers

    RFID is the fastest-growing part of the portfolio, and management is building RFID reading into new mobile computers so tag adoption pulls device sales along with it.

    Q4 FY2025 call
Bear · 1

  • Results swing with a handful of large customer orders

    North America sales declined in the fourth quarter simply because large retail and logistics orders in the prior year did not repeat, showing how much one deployment moves a quarter.

    Q4 FY2025 call