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zSpace, Inc.
(OTC:ZSPC)
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Rating:43Neutral
Price Target:
$0.13
▼(-7.14% Downside)
Action:Reiterated
Date:08/26/26
The score is held down primarily by weak financial performance (shrinking revenue, very large losses, ongoing cash burn, and negative equity). Technical signals also remain bearish with price below key moving averages and negative MACD. Offsetting these are some operational positives from the earnings call (margin expansion and major cost reductions with sequential demand recovery) and a debt restructuring that reduces leverage, but these are not yet sufficient to outweigh the core profitability and liquidity risks.
Positive Factors
Gross Margin Expansion
Gross-margin expansion to 53% and a higher software/services mix can improve unit economics and reduce dependence on hardware volume. If sustained, these changes would support a more scalable model and make future operating-cost absorption more achievable.
Negative Factors
Sustained Revenue Contraction
Revenue has declined from about $43.9M in 2023 to $24.3M TTM, while the latest quarter fell 22% YoY. This sustained contraction limits scale economies, weakens investment capacity, and makes profitability dependent on a durable demand recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Gross Margin Expansion
Gross-margin expansion to 53% and a higher software/services mix can improve unit economics and reduce dependence on hardware volume. If sustained, these changes would support a more scalable model and make future operating-cost absorption more achievable.
Read all positive factors
zSpace, Inc. (ZSPC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.93M
Dividend YieldN/A
Average Volume (3M)909.43K
Price to Earnings (P/E)―
Beta (1Y)0.58
Revenue Growth-34.31%
EPS Growth1.15%
CountryUS
Employees54
SectorGeneral
Sector StrengthN/A
IndustryComputer Hardware
Share Statistics
EPS (TTM)-20.30
Shares Outstanding37,067,920
10 Day Avg. Volume517,754
30 Day Avg. Volume909,428
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)-0.52
Price to Sales (P/S)0.42
P/FCF Ratio-0.66
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)-2.62
Revenue Forecast (FY)$27.55M
zSpace, Inc. Business Overview & Revenue Model
Company Description
zSpace, Inc. provides augmented and virtual reality educational technology solutions for K-12 schools, and career and technical education markets in the United States and internationally. The company provides hardware products to produce devices t...
How the Company Makes Money
zSpace makes money primarily by selling its education-focused immersive learning platform to institutions such as schools and school districts. Key revenue streams include: (1) hardware sales of zSpace devices and related components used to run th...
zSpace, Inc. Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: encouraging operational progress (sequential revenue/bookings recovery, gross margin expansion, meaningful cost reductions, product launches and notable deployments) alongside material top-line and retention challenges (22% YoY revenue decline, ACV down 13%, NDRR at 65% for the reported cohort), geopolitical order disruptions, constrained funding visibility in target markets, and a modest absolute cash balance. Management's actions (expense cuts, product innovations, and a Board strategic review) and sequential improvements provide cautious optimism, but significant YoY declines and renewal shortfalls prevent a clearly positive view.Positive Updates
Sequential Revenue and Bookings Recovery
Revenue grew 8% sequentially off Q4 2025 weakness, and bookings for the quarter were $6.1M (down 8% YoY) but up 81% sequentially, indicating improving demand momentum in early 2026.
Negative Updates
Year-over-Year Revenue Decline
First quarter revenues were $5.3M, down 22% YoY, reflecting continued top-line pressure following a challenging 2025.
Read all updates
Q1-2026 Updates
Positive
Negative
Sequential Revenue and Bookings Recovery
Revenue grew 8% sequentially off Q4 2025 weakness, and bookings for the quarter were $6.1M (down 8% YoY) but up 81% sequentially, indicating improving demand momentum in early 2026.
Read all positive updates
Company Guidance
Management did not provide formal guidance but outlined a scenario where, with modest sequential gross‑margin expansion and current run‑rate operating expenses (~$19M annual, excluding stock‑based comp), the company could approach EBITDA breakeven by year‑end; that scenario assumes a repeat of last year’s ~ $30M top line (versus pre‑IPO demand of $35–44M) and illustrative quarterly seasonality of 20% Q1 / 30% Q2 / 30% Q3 / 20% Q4. Key Q1 metrics supporting the view included bookings of $6.1M (‑8% YoY, +81% QoQ), revenue $5.3M (‑22% YoY, +8% QoQ) with software & services 47% of revenue (up from 43%), ACV of renewable software $10.1M (‑13% YoY, +2% QoQ; normalized $11.2M), net dollar retention for ≥$50k ACV customers 65% (normalized 82%), gross profit $2.8M (‑13% YoY) and gross margin 53% (+5.6 ppt YoY, +3.9 ppt QoQ), operating expenses $4.9M ex‑SBC (‑35% YoY) with people costs 54% of OpEx (‑43% YoY), and cash of $2.9M versus $1.1M a year ago—factors management cited as consistent with the breakeven pathway if demand and margins track their assumptions.zSpace, Inc. Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
12
Very Negative
Cash Flow
16
Very Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 24.29M | 27.86M | 38.10M | 43.92M | 35.78M |
| Gross Profit | 12.71M | 13.26M | 15.57M | 16.89M | 13.13M |
| EBITDA | -22.66M | -23.89M | -17.96M | -10.10M | -11.38M |
| Net Income | -19.72M | -25.39M | -20.82M | -13.04M | -15.17M |
Balance Sheet | |||||
| Total Assets | 8.28M | 7.59M | 13.53M | 13.85M | 18.21M |
| Cash, Cash Equivalents and Short-Term Investments | 856.00 | 1.02M | 4.86M | 2.82M | 4.06M |
| Total Debt | 6.49M | 17.71M | 11.96M | 19.07M | 44.50M |
| Total Liabilities | 21.47M | 30.09M | 28.22M | 144.32M | 65.68M |
| Stockholders Equity | -13.19M | -22.51M | -14.69M | -130.47M | -47.47M |
Cash Flow | |||||
| Free Cash Flow | -11.40M | -18.00M | -8.89M | -6.42M | -8.91M |
| Operating Cash Flow | -11.38M | -17.97M | -8.87M | -6.41M | -8.90M |
| Investing Cash Flow | -16.00K | -26.00K | -13.00K | -5.00K | -11.00K |
| Financing Cash Flow | 11.04M | 14.38M | 10.48M | 5.59M | 6.94M |
zSpace, Inc. Technical Analysis
Negative
0.14
Price Trends
0.18
Negative
0.38
Negative
5.11
Negative
Market Momentum
>-0.01
Positive
45.22
Neutral
29.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZSPC, the sentiment is Negative. The current price of 0.14 is below the 20-day moving average (MA) of 0.18, below the 50-day MA of 0.18, and below the 200-day MA of 5.11, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 45.22 is Neutral, neither overbought nor oversold. The STOCH value of 29.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZSPC.
zSpace, Inc. Risk Analysis
zSpace, Inc. disclosed 53 risk factors in its most recent earnings report. zSpace, Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Our common stock has been suspended from trading on Nasdaq and will be delisted, which has reduced the liquidity of our common stock and may impair our ability to raise capital. Q2, 2026
2.
We have issued a substantial number of shares of common stock, and we have limited authorized share capacity available to satisfy our obligations under our outstanding convertible securities. Q2, 2026
zSpace, Inc. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $40.51M | -0.88 | -15.75% | ― | -18.35% | -170.78% | |
63 Neutral | $52.45M | -151.95 | -1.25% | ― | 10.52% | 95.37% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
47 Neutral | $69.20M | -1.87 | -100.84% | ― | -35.13% | 96.88% | |
46 Neutral | $13.85M | -1.12 | -5.66% | ― | -6.25% | 32.66% | |
44 Neutral | $6.45M | -0.39 | -142.26% | ― | -17.40% | -403.07% | |
43 Neutral | $5.93M | >-0.01 | 116.23% | ― | -34.31% | 1.15% |
* General Sector Average
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zSpace, Inc. Corporate Events
Business Operations and StrategyPrivate Placements and Financing
zSpace Restructures Debt and Overhauls Capital Structure
Positive
Jun 1, 2026
On May 28, 2026, zSpace, Inc. undertook a comprehensive restructuring of about $12 million of debt owed to 3i, LP and Fiza Investments Limited, converting portions into common stock and a new Series P-2 Convertible Preferred Stock while amending e...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.