Zebra Technologies (ZBRA) stock plunged 7.24% in Tuesday's trading session, despite reporting better-than-expected third-quarter results. The sharp decline appears to be driven by concerns over the company's fourth-quarter guidance and a significant decrease in net income margin.

For the third quarter, Zebra reported adjusted earnings per share of $3.88, surpassing the analyst estimate of $3.75. Net sales came in at $1.32 billion, slightly above the expected $1.31 billion and representing a 5.2% increase year-over-year. However, the company's net income margin decreased to 7.7% from 10.9% in the same period last year, raising concerns about profitability.

Looking ahead, Zebra provided fourth-quarter guidance that seems to have fallen short of investor expectations. The company forecasts Q4 adjusted EPS between $4.20 and $4.40, with sales growth projected at 8% to 11% compared to the prior year. While this outlook suggests continued growth, it may not have been strong enough to maintain investor confidence in the face of margin pressures. Additionally, Zebra announced plans to repurchase an additional $500 million in shares through the third quarter of 2026, but this news appears insufficient to offset the negative sentiment surrounding the company's near-term prospects.