zSpace, Inc. (ZSPC)
NASDAQ:ZSPC
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zSpace, Inc.
(NASDAQ:ZSPC)
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Rating:42Neutral
Price Target:
$0.41
▲(47.14% Upside)
Action:UpgradedDate:01/10/26
The score is weighed down primarily by weak financial performance (declining revenue, very large losses, negative equity, and significant cash burn). Technicals also remain pressured with the stock below key longer-term moving averages and negative MACD. Offsetting these risks, the latest earnings call showed improving mix toward software/services and higher gross margins with sequential growth, but year-over-year declines and the absence of formal guidance keep confidence limited.
Positive Factors
Shift to Software & Services
A majority software/services mix is a structural business improvement: recurring and contractable revenue increases predictability, reduces reliance on lumpy hardware cycles, and supports higher lifetime value per customer. Over 2–6 months this aids margin expansion and more scalable growth if retention stabilizes.
Negative Factors
Persistent Cash Burn
Continued heavy negative operating and free cash flow is a structural threat: it requires recurring external funding, limits investment in sales/product, and elevates dilution risk. Without sustained margin gains or revenue stabilization, cash burn will pressure runway and strategic options over months.
Read all positive and negative factors
Positive Factors
Negative Factors
Shift to Software & Services
A majority software/services mix is a structural business improvement: recurring and contractable revenue increases predictability, reduces reliance on lumpy hardware cycles, and supports higher lifetime value per customer. Over 2–6 months this aids margin expansion and more scalable growth if retention stabilizes.
Read all positive factors
zSpace, Inc. (ZSPC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.09M
Dividend YieldN/A
Average Volume (3M)909.43K
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth-24.20%
EPS Growth1.31%
CountryUS
Employees78
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.21
Shares Outstanding33,302,982
10 Day Avg. Volume517,754
30 Day Avg. Volume909,428
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)-3.55
Price to Sales (P/S)1.37
P/FCF Ratio-5.86
Enterprise Value/Market Cap2.36
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit0.67
Enterprise Value/Ebitda-0.48
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-0.81
Revenue Forecast (FY)$32.91M
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 StudioA3, an application that allows t...
How the Company Makes Money
zSpace generates revenue through several key streams, primarily by selling its zSpace systems, including hardware and software packages, to educational institutions and training organizations. They also monetize through licensing of their software...
zSpace, Inc. Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 30, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong international expansion and improvements in software and services revenue, which contributed to gross margin growth. However, these positives were countered by significant year-over-year declines in revenue and bookings, challenges in the U.S. market, and the impact of the government shutdown, leading to a balanced view of the company's performance.Positive Updates
Growth in Software and Services Revenue
Software and services revenue comprised over 50% of total revenue, contributing to a gross margin expansion of over 640 basis points.
Negative Updates
Year-over-Year Revenue Decline
Year-to-date revenues were $23 million, down 22% year-over-year.
Read all updates
Q3-2025 Updates
Positive
Negative
Growth in Software and Services Revenue
Software and services revenue comprised over 50% of total revenue, contributing to a gross margin expansion of over 640 basis points.
Read all positive updates
Company Guidance
During the conference call, zSpace provided substantial guidance regarding its financial performance and strategic direction, focusing on several key metrics. For the third quarter of 2025, software and services revenue made up over 50% of the total revenue, contributing to a gross margin expansion of over 640 basis points. The company saw an 18% sequential revenue growth, despite a 38% year-over-year decline in Q3 revenues to $8.8 million, largely due to factors such as tariff impacts and funding uncertainties in the U.S. K-12 market. Year-to-date revenues were $23 million, reflecting a 22% decline year-over-year. Notably, software and services represented 57% of Q3 revenues, an 11 percentage point increase from the previous year. The annualized contract value of renewable software was reported at $10.2 million, down 10% year-over-year, with a net dollar revenue retention rate of 77%. Gross margins improved to 51.2% for Q3, marking a 6.4 percentage point increase from the same quarter last year. Operating expenses rose by 4% year-over-year, excluding stock-based compensation. zSpace ended Q3 with approximately $4.3 million in cash, cash equivalents, and restricted cash, up from $3.0 million a year earlier. Despite challenges, the company remains cautiously optimistic about future growth, particularly with international market expansions and new product innovations. However, due to ongoing uncertainties, the company refrained from issuing formal financial guidance for the remainder of the year.zSpace, Inc. Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
18
Very Negative
Cash Flow
24
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 31.55M | 38.10M | 43.92M | 35.78M |
| Gross Profit | 14.35M | 15.57M | 16.89M | 13.13M |
| EBITDA | -19.96M | -17.96M | -10.10M | -11.38M |
| Net Income | -21.73M | -20.82M | -13.04M | -15.17M |
Balance Sheet | ||||
| Total Assets | 13.46M | 13.53M | 13.85M | 18.21M |
| Cash, Cash Equivalents and Short-Term Investments | 4.27M | 4.86M | 2.82M | 4.06M |
| Total Debt | 10.96M | 11.96M | 19.07M | 44.50M |
| Total Liabilities | 33.14M | 28.22M | 144.32M | 65.68M |
| Stockholders Equity | -19.68M | -14.69M | -130.47M | -47.47M |
Cash Flow | ||||
| Free Cash Flow | -19.07M | -8.89M | -6.42M | -8.91M |
| Operating Cash Flow | -19.05M | -8.87M | -6.41M | -8.90M |
| Investing Cash Flow | -26.00K | -13.00K | -5.00K | -11.00K |
| Financing Cash Flow | 20.16M | 10.48M | 5.59M | 6.94M |
zSpace, Inc. Technical Analysis
Negative
0.28
Price Trends
0.31
Negative
0.43
Negative
1.30
Negative
Market Momentum
-0.05
Negative
27.17
Positive
8.73
Positive
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 0.28 is above the 20-day moving average (MA) of 0.19, below the 50-day MA of 0.31, and below the 200-day MA of 1.30, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 27.17 is Positive, neither overbought nor oversold. The STOCH value of 8.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZSPC.
zSpace, Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $33.48M | -8.95 | -3.96% | ― | 8.27% | -308.63% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
53 Neutral | $29.21M | -0.81 | -13.42% | ― | -20.03% | -485.19% | |
47 Neutral | $7.17M | -0.56 | -17.53% | ― | -13.01% | -65.20% | |
46 Neutral | $11.32M | -1.15 | -7.04% | ― | 154.52% | 47.31% | |
45 Neutral | $38.31M | -5.65 | -180.40% | ― | -6.34% | 98.60% | |
42 Neutral | $4.09M | -0.95 | 113.93% | ― | -24.20% | 1.31% |
* Technology Sector Average
ZSPC
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zSpace, Inc. Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
zSpace Raises Preferred Equity, Reshapes Capital Structure
Neutral
Jan 29, 2026
On January 23, 2026, zSpace, Inc. entered into a securities purchase agreement with an institutional investor to issue Series P Convertible Preferred Stock and five-year warrants for its common stock in one or more closings, with an initial closin...
Business Operations and StrategyPrivate Placements and Financing
zSpace Amends Convertible Note Terms to Increase Flexibility
Negative
Jan 9, 2026
On January 8, 2026, zSpace, Inc. amended the terms of a senior secured convertible note originally issued on April 11, 2025 to an institutional investor, reducing the note’s “Floor Price” for conversion from $0.60 to $0.22 per sh...
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesRegulatory Filings and Compliance
zSpace, Inc. Faces Nasdaq Non-Compliance Notice
Negative
Dec 12, 2025
On December 11, 2025, zSpace, Inc. received a notice from Nasdaq indicating non-compliance with the minimum bid price requirement, as its stock price had fallen below $1.00 for 30 consecutive business days. The company has until June 9, 2026, to r...
Delistings and Listing ChangesRegulatory Filings and Compliance
zSpace, Inc. Faces Nasdaq Non-Compliance Notice
Negative
Nov 28, 2025
On November 25, 2025, zSpace, Inc. received a notice from Nasdaq indicating non-compliance with the requirement to maintain a minimum market value of listed securities of $35 million. The company has until May 26, 2026, to regain compliance by ach...
Business Operations and StrategyFinancial Disclosures
zSpace, Inc. Reports Q3 2025 Financial Results
Neutral
Nov 13, 2025
zSpace, Inc. reported its financial results for the third quarter of 2025, highlighting a focus on strategic priorities and software revenue growth, which now comprises over 50% of total revenue. Despite a decrease in total revenue to $8.8 million...
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.