Now I have sufficient material to write a comprehensive earnings preview.# Zebra Technologies (ZBRA) — Q2 2026 Earnings Preview Report date: Tuesday, August 4, 2026, before market open | Call at 8:30 AM ET
ZBRA shares have had a strong run heading into this report, up roughly 17-18% year-to-date and trading near 52-week highs around $290-294 — including a notable 7.5% single-day pop on July 28 that a market-analysis note attributed largely to "growing optimism ahead of Zebra Technologies' second-quarter 2026 earnings report on August 4, combined with carryover confidence from its strong first-quarter results and higher full-year outlook," with no major new company-specific catalyst identified, suggesting some of the rally is simply positioning into earnings. Sell-side price targets have been marching higher all summer — Citi to $306, Wolfe Research to $317, Truist to $296, and Barclays to $346 — and the stock carries a consensus "Moderate Buy"/"Buy" rating from the roughly 17-18 analysts covering it, with average price targets in the low-$330s.
That said, expectations are now elevated, which raises the bar for what counts as a "good" quarter.
At the Q1 print (May 12), management guided Q2 to sales growth of 14% to 17%, including approximately 10.5 points of contribution from business acquisitions and favorable FX, second quarter adjusted EBITDA margin slightly higher than 21%, and non-GAAP diluted EPS between $4.20 and $4.50. Consensus has settled essentially at the high end of that range: analysts are modeling EPS around $4.35-$4.37 on revenue near $1.50 billion (roughly 16-21% reported growth), which would represent a sequential step-down from Q1's $4.75 — a deceleration management flagged itself, driven mainly by rising memory costs. Zebra has beaten Street EPS estimates in three of its last four quarters, and beat handily (+12-13%) last quarter, so there's a credible track record of upside, but the bar is arguably higher this time given how much the stock has already re-rated.
For the full year, the current guide (raised at Q1) calls for full-year sales growth outlook to a 10% to 14% range... and now targets an adjusted EBITDA margin of about 22%. Non-GAAP EPS guidance was lifted to a range of $18.30 to $18.70, with free cash flow projected to reach at least $900 million for the year, representing a 100% conversion rate and supporting continued opportunistic share repurchases.
Zebra's first quarter was clean and broad-based: Zebra reported nearly $1.5 billion in Q1 sales, representing 14.3% year-over-year growth on a reported basis and 4.3% growth organically in constant currency. The Connected Frontline segment grew 20.6%, aided by the Elo acquisition, while still posting 3.8% organic growth, and Asset Visibility & Automation rose 4.8%. Regionally, Asia Pacific led with 11% growth, followed by Latin America at 10%, North America at 4%, and EMEA at 2%. Gross margin hit a multi-year high (50.4%, +80bps), and manufacturing customers were a key driver, with their robust spending helping lift both overall sales and gross margins as automation projects continued to gain traction. The stock jumped over 11% on the print.
This is the single biggest swing factor for the quarter and the stock's reaction. On the Q1 call, CFO Nathan Winters explained the sequential margin step-down was Q1 to Q2... driven by the higher memory costs in the quarter as well as just normalized deal mix, and that management had expects to fully mitigate a 2-point margin headwind from memory costs through targeted price increases and direct supplier co-planning, with the CFO noting memory supply remains a primary risk; management is transitioning to higher-density components where capacity is expected to increase through 2027.
The problem: since that call in May, the broader DRAM/NAND pricing backdrop has gotten materially worse. Industry trackers now show conventional DRAM contract prices to rise 13% to 18% quarter-over-quarter (QoQ) in Q3 2026... a marked slowdown from the roughly 60% jumps recorded in the second quarter, and multiple memory suppliers (SK Hynix, Intel, Micron) have publicly warned the shortage could persist for years, driven by AI hyperscaler demand for HBM crowding out conventional DRAM supply. Zebra is a direct, if modest, purchaser of conventional memory for its mobile computers and other devices, and management said on the Q1 call that its "business environment has changed drastically... In terms of profits, we are facing headwinds"-type dynamics (a sentiment echoed broadly across hardware peers) is exactly what's being tested now.
Key questions for the call: - Did the ~60% Q2 DRAM cost surge exceed what Zebra had already baked into its guidance, or is the company still tracking to "in line with prior guidance" as claimed in May? - Is the 2-point full-year memory margin headwind still fully offset by pricing/productivity, or is there any risk to the ~22% EBITDA margin target? - Any changes to memory supply (not just price) — Winters noted in Q1 that our second half guide assumes a similar memory supply as received in the first half... We've received no indication that our second half allocation would be any less than the first half. Investors will want reassurance that assumption still holds.
Zebra goes into this print with real momentum — raised guidance, record gross margins, broad-based organic growth, and a stock that's already up sharply and richly re-rated by the sell-side. The setup is a "high-quality problem": consensus numbers ($4.35-$4.37 EPS, ~$1.50B revenue) sit near the top of management's own guidance range, meaning an in-line quarter may not be enough to extend the rally, while any signal that the memory/DRAM cost spiral is outrunning the company's mitigation plan (price increases + restructuring savings + volume leverage) is probably the single biggest risk to the margin/EPS trajectory and, by extension, to a stock that has priced in a lot of good news already. Watch the Q2 EBITDA margin print relative to "slightly higher than 21%," any change to full-year guidance, and management's tone on second-half memory cost/supply visibility as the key tells.