ZTEST Electronics (ZTE) AI Stock Analysis

• Market Cap: C$10.71M
• Dividend Yield: N/A
• Average Volume (3M): 112.79K
• Price to Earnings (P/E): 6.3
• Beta (1Y): 0.28
• Revenue Growth: -17.91%
• EPS Growth: -54.21%
• Country: CA
• Employees: N/A
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.01
• Shares Outstanding: 36,936,703
• 10 Day Avg. Volume: 77,129
• 30 Day Avg. Volume: 112,789
• PEG Ratio: -0.19
• Price to Book (P/B): 1.75
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 6.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: C$0.34 ▲(9.35% Upside)
• Action: Reiterated Date: 03/02/26
• Date: Action: Reiterated 03/02/26

The score is supported primarily by strong financial performance (high profitability and a very low-leverage balance sheet), with valuation also favorable due to the low P/E. Offsetting these strengths are weaker cash-flow trends (notable free cash flow decline and operating cash flow below net income) and a mixed technical backdrop with short-term price softness.

Positive Factors

Conservative balance sheet / very low leverage

Extremely low leverage and meaningful equity growth provide durable financial flexibility. This conservative financing reduces solvency risk, enables strategic investment or M&A without heavy new borrowing, and cushions the firm through industry cycles, supporting long-term resilience.

Solid profitability and margins

Sustained gross, operating and net margins underpin internal cash generation and pricing power. Strong margin structure permits ongoing R&D and product investment, helps absorb revenue volatility, and supports persistent return generation even if growth moderates.

Improved cash-generation trend vs earlier years

A multi-year recovery in cash generation increases long-term financial stability. With TTM FCF roughly aligned with earnings, the company has greater capacity to fund capex, service obligations, and reinvest in products without returning to historical reliance on external financing.

Negative Factors

Cash-flow conversion weakness

OCF trailing net income and a notable FCF step-down point to weaker cash conversion from reported earnings. Persistent working-capital strain or heavier investment needs can limit discretionary spending, constrain reinvestment and shareholder returns, and raise execution risk.

Revenue deceleration / negative top-line growth

A roughly 10% reported revenue decline signals demand or share pressures. Sustained top-line contraction erodes scale economics, tightens operating leverage, reduces reinvestment capacity, and makes margin recovery and sustained profit growth harder without structural market or product fixes.

Material EPS decline

A ~30% drop in EPS reflects meaningful earnings pressure and weaker profitability trends. Continued EPS deterioration can reduce retained capital, limit strategic options, and indicate deeper competitiveness or cost-structure issues needing corrective actions to restore durable earnings power.

ZTEST Electronics Business Overview & Revenue Model

Company Description

ZTEST Electronics Inc., through its subsidiary, Permatech Electronics Corporation, designs, develops, and assembles printed circuit boards and other electronic equipment in Canada. It serves customers in the medical, power, computer, telecommunication, wireless, industrial, and consumer electronics markets. The company is based in Toronto, Canada.

How the Company Makes Money

ZTEST Electronics generates revenue through multiple channels, primarily by selling its core products such as smartphones, telecommunications equipment, and smart devices. The company benefits from both direct sales to consumers and partnerships with major telecommunications operators and retailers, which help to expand its market reach. Additionally, ZTE earns income through service contracts, software licensing, and maintenance services associated with its products. Strategic partnerships with other technology companies enhance its product offerings and market presence, driving further revenue growth.

ZTEST Electronics Financial Statement Overview

Summary

Strong overall fundamentals driven by robust profitability and an exceptionally conservative balance sheet (minimal leverage, meaningful equity growth). The main drag is cash flow: operating cash flow is below net income in the TTM period and free cash flow declined meaningfully versus the prior period, alongside moderating revenue growth and some margin normalization.

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability with healthy gross and operating margins and a strong net margin. Revenue is still growing (mid-single digits), but growth has moderated versus prior years and margins have come down from the peak in FY2024. Overall, the income profile looks strong, with the main watch-out being decelerating growth and some margin compression from last year’s exceptionally strong levels.

Balance Sheet

The balance sheet is a clear strength: leverage is extremely low in TTM (Trailing-Twelve-Months) with minimal debt relative to equity, and equity has grown meaningfully versus earlier years. Returns on equity remain attractive, though they have eased from FY2024’s unusually high level. Key risk appears limited here, as the company has moved from historically higher leverage (FY2021–FY2022) to a very conservatively financed position.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) free cash flow roughly in line with reported earnings, which supports earnings quality. However, operating cash flow is running below net income in the TTM period, and free cash flow declined meaningfully versus the prior period, indicating some pressure from working capital or investment needs. Cash flow has improved dramatically from earlier years, but the recent step-down in free cash flow is the main weakness.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	8.52M	8.32M	9.76M	5.70M	4.42M	4.01M
Gross Profit	3.30M	3.28M	3.92M	1.74M	1.13M	1.23M
EBITDA	1.96M	1.84M	2.60M	492.62K	20.87K	218.97K
Net Income	1.22M	1.09M	1.75M	165.27K	-266.88K	45.76K
Balance Sheet
Total Assets	7.88M	7.20M	7.01M	3.94M	3.08M	3.12M
Cash, Cash Equivalents and Short-Term Investments	4.41M	4.10M	2.78M	232.88K	267.64K	557.01K
Total Debt	68.94K	193.74K	437.12K	839.03K	948.79K	1.16M
Total Liabilities	1.35M	1.39M	2.51M	2.83M	2.20M	2.12M
Stockholders Equity	6.53M	5.81M	4.50M	1.11M	883.16K	1.00M
Cash Flow
Free Cash Flow	985.46K	1.57M	1.75M	93.85K	-202.88K	-57.71K
Operating Cash Flow	1.04M	1.62M	2.43M	93.85K	-195.21K	355.51K
Investing Cash Flow	-55.68K	-52.79K	-687.37K	0.00	-7.67K	-413.22K
Financing Cash Flow	-249.21K	-238.87K	797.37K	-128.61K	-86.49K	394.32K

ZTEST Electronics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.31
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ZTE, the sentiment is Negative. The current price of 0.31 is above the 20-day moving average (MA) of 0.31, above the 50-day MA of 0.30, and above the 200-day MA of 0.28, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.54 is Neutral, neither overbought nor oversold. The STOCH value of 13.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ZTE.

ZTEST Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZTE	76 Outperform	C$10.71M	6.25	18.01%	―	-17.91%	-54.21%
CLS	72 Outperform	$40.38B	40.24	40.49%	―	25.34%	109.17%
PNG	62 Neutral	C$2.87B	104.52	11.18%	―	11.77%	45.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EDY	43 Neutral	C$10.85M	-32.58	―	―	26.56%	94.17%
YNV	37 Underperform	C$17.49M	-4.69	-155.37%	―	-21.98%	-32.07%

ZTEST Electronics Corporate Events

ZTEST Electronics Delivers 19% Revenue Growth and Doubled Profit in Q2 2026

ZTEST Electronics reported fiscal 2026 second-quarter revenue of $2.48 million, up 19% year over year, with net income more than doubling to $425,913, marking its strongest quarterly profit since mid-2024. The company also improved gross margin, EBITDA, operating cash flow and liquidity, while reducing long-term debt and strengthening working capital and shareholders’ equity.

Management highlighted that these gains were achieved despite a cyclical slowdown in the broader electronics industry, underscoring ZTEST’s focus on quality, customer service and disciplined risk management. The results suggest improved operating efficiency and financial resilience, reinforcing the firm’s positioning as a specialized EMS provider and supporting its emphasis on long-term shareholder value.

The most recent analyst rating on (TSE:ZTE) stock is a Buy with a C$0.36 price target. To see the full list of analyst forecasts on ZTEST Electronics stock, see the TSE:ZTE Stock Forecast page.

ZTEST Electronics Grants 900,000 Stock Options to Key Personnel

ZTEST Electronics Inc. has announced the granting of 900,000 stock options to its directors, officers, and employees, exercisable at $0.28 per share over five years. This move is likely aimed at incentivizing and retaining key personnel, potentially enhancing the company’s operational stability and market competitiveness.