Zapata Computing Holdings (ZPTA) AI Stock Analysis

• Market Cap: $7.35M
• Dividend Yield: N/A
• Average Volume (3M): 107.39K
• Price to Earnings (P/E): ―
• Beta (1Y): -267.97
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 50
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): N/A
• Shares Outstanding: 52,527,676
• 10 Day Avg. Volume: 93,328
• 30 Day Avg. Volume: 107,393
• PEG Ratio: 0.02
• Price to Book (P/B): -5.43
• Price to Sales (P/S): 9.76
• P/FCF Ratio: -3.76
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -0.59
• Revenue Forecast (FY): $14.00M

• Rating: 39 Underperform
• Price Target: ―

Zapata Computing Holdings faces substantial financial and operational challenges, highlighted by negative profitability, increased leverage, and significant cash flow issues. The upcoming Nasdaq delisting further underscores the company's precarious situation. While there are positive signs in revenue growth and partnerships, these are overshadowed by severe financial risks and operational uncertainties, leading to a low overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and product adoption, crucial for sustaining operations and funding future innovations.

Strategic Partnerships

Strategic partnerships enhance market credibility and provide access to new markets and technologies, supporting long-term growth and innovation.

Pipeline Opportunities

A robust pipeline of sales opportunities suggests potential for future revenue streams, aiding in financial stability and market expansion.

Negative Factors

Negative Profitability

Persistent negative profitability margins indicate operational inefficiencies and high costs, threatening long-term financial health and sustainability.

High Operating Costs

Rising operating costs reduce profitability and cash flow, limiting the company's ability to invest in growth and innovation over the long term.

Negative Cash Flow

Negative cash flow indicates challenges in funding operations and investments internally, increasing reliance on external financing and raising financial risk.

Zapata Computing Holdings Business Overview & Revenue Model

Company Description

Zapata Computing, Inc. develops and operates quantum software that composes workflows in the YAML-compatible Zapata Quantum Workflow Language, arranges component tasks and algorithms, and tunes parameters across experiments and quantum devices. The company offers Orquestra, a software that is used to compose quantum workflows, conduct workflows across quantum and classical hardware, and record results that are packaged in a database. It serves finance, healthcare and pharmaceuticals, transportation and logistics, materials, energy and utilities, aerospace and automotive, chemistry, digital content, blockchain, and defense industries. The company was incorporated in 2017 and is based in Boston, Massachusetts with additional offices in Brentwood, Tennessee and Toronto, Canada.

How the Company Makes Money

Zapata Computing Holdings generates revenue primarily through the licensing of its quantum software platform, Orquestra, and associated services. The company offers subscription-based access to its platform, which provides customers with the ability to develop and run quantum algorithms and applications. Additionally, Zapata provides consulting services, training, and support to enterprises looking to integrate quantum computing into their operations. Key revenue streams include software licensing fees, professional service charges, and strategic partnerships with technology companies and research institutions that contribute to the advancement and commercialization of quantum computing solutions.

Zapata Computing Holdings Financial Statement Overview

Summary

Zapata Computing Holdings is experiencing financial stress with negative profitability margins, negative equity, and ongoing cash flow challenges. Despite modest revenue growth, the company's high operational costs and leveraged balance sheet pose risks to financial stability. Improvements in free cash flow growth provide a slight positive outlook, but significant improvements in profitability and balance sheet strength are required.

Income Statement

Zapata Computing Holdings shows a modest revenue growth rate of 10.01% from 2022 to 2023. However, the company is struggling with profitability, as evidenced by a negative gross profit margin of -19.38% in 2023 and deteriorating net profit margins, reaching -523.12% in 2023. Both EBIT and EBITDA margins are negative, indicating operational challenges and high costs relative to revenue.

Balance Sheet

The balance sheet of Zapata Computing Holdings reveals significant financial leverage issues, with a negative stockholders' equity of -$10.23 million in 2023, leading to a negative equity ratio. The debt-to-equity ratio cannot be assessed due to negative equity, indicating potential solvency risks. The return on equity is also negative, reflecting the company's inability to generate returns for its shareholders.

Cash Flow

Cash flow analysis indicates a challenging liquidity position with a negative free cash flow of -$14.76 million in 2023. Free cash flow improved compared to previous years, with a growth rate of 30.50%, yet it remains negative. The operating cash flow to net income ratio is unfavorable, showing ineffective cash generation from operations.

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.22M	5.68M	5.17M	832.00K
Gross Profit	887.00K	1.10M	1.63M	-174.00K
EBITDA	-39.51M	-628.00K	-23.21M	-16.82M
Net Income	-40.56M	-29.73M	-23.45M	-17.01M
Balance Sheet
Total Assets	11.19M	8.07M	13.45M	33.02M
Cash, Cash Equivalents and Short-Term Investments	7.30M	3.47M	616.12K	31.03M
Total Debt	4.46M	2.45M	605.00K	240.55K
Total Liabilities	38.14M	18.29M	70.53M	67.86M
Stockholders Equity	-26.96M	-10.23M	-57.08M	-34.84M
Cash Flow
Free Cash Flow	-9.13M	-14.76M	-21.24M	-16.42M
Operating Cash Flow	-9.11M	-14.76M	-20.99M	-16.30M
Investing Cash Flow	161.02M	161.04M	-253.00K	-121.00K
Financing Cash Flow	-148.29M	-158.45M	280.00K	715.00K

Zapata Computing Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.20
• 50DMA: Positive
• 100DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZPTA, the sentiment is Positive. The current price of 0.2 is above the 20-day moving average (MA) of 0.14, above the 50-day MA of 0.12, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.98 is Neutral, neither overbought nor oversold. The STOCH value of 38.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZPTA.

Zapata Computing Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JG	58 Neutral	$39.56M	―	-5.30%	―	20.68%	84.93%
ARQQ	46 Neutral	$393.62M	―	-160.52%	―	-67.43%	87.17%
VRAR	42 Neutral	$29.49M	-10.83	-19.02%	―	16.60%	70.20%
ARBE	41 Neutral	$150.38M	-3.07	-142.36%	―	-34.35%	20.88%
ZPTA	39 Underperform	$7.35M	―	―	―	―	―