zSpace, Inc. (ZSPC) AI Stock Analysis

• Market Cap: $15.97M
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.22
• Revenue Growth: -24.20%
• EPS Growth: 1.31%
• Country: US
• Employees: 78
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): -0.21
• Shares Outstanding: 29,050,068
• 10 Day Avg. Volume: 640,903
• 30 Day Avg. Volume: 1,011,004
• PEG Ratio: 0.02
• Price to Book (P/B): -3.55
• Price to Sales (P/S): 1.37
• P/FCF Ratio: -5.86
• Enterprise Value/Market Cap: 2.38
• Enterprise Value/Revenue: 1.20
• Enterprise Value/Gross Profit: 2.64
• Enterprise Value/Ebitda: -1.90
• 1Y Price Target: $2.30
• Price Target Upside: 342.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.85
• Revenue Forecast (FY): $41.40M

• Rating: 42 Neutral
• Price Target: $0.49 ▼(-5.38% Downside)

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

Software/Services Mix Shift

A majority-software mix (57% of Q3 revenue) increases recurring and higher-margin revenue, improving revenue predictability and customer retention. Structurally this reduces reliance on cyclical hardware sales and supports scalable unit economics as software revenue grows.

Gross Margin Improvement

Material gross margin expansion to 51.2% reflects better product mix and pricing leverage from software/services. Sustained higher gross margins provide a durable cushion to absorb SG&A and R&D as the company scales, improving the path to operating leverage over months.

Material Debt Reduction

Meaningful reduction in debt from 2022 levels lowers interest burden and covenant pressure, preserving financial flexibility. This structural deleveraging improves the company's ability to pursue international expansion and product investment without immediate refinancing risk.

Negative Factors

Sustained Revenue Decline and Large Losses

Ongoing top-line declines and deep net losses indicate the current cost base is misaligned with scale. Persistently negative margins require repeated external funding or steep restructuring to reach break-even, making long-term profitability contingent on sustained revenue recovery.

Negative Stockholders' Equity

Persistent negative equity erodes balance-sheet cushion and constrains access to traditional financing, increasing reliance on dilutive capital or expensive credit. Structurally this limits strategic flexibility and makes the company more vulnerable to adverse shocks over the medium term.

Convertible Note Amendment Raises Dilution Risk

The recent amendment easing conversion floors gives the company more flexibility to satisfy obligations with equity but increases potential shareholder dilution. Structurally, this reduces future equity value per share and signals dependence on financing levers until profitability or cash flow stabilizes.

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 teachers to build lessons for various subject using pre-made models; hardware products comprising stylus, eyewear, laptop, and power adapter products; and installation and/or training services. Its platform offers a range of educational tools designed for K-12 science, technology, engineering, and math lessons, as well as training skilled trades in areas, such as health sciences, automotive engineering/repair, and software programming and advanced manufacturing. The company was formerly known as Infinite Z, Inc. and changed its name to zSpace, Inc. in February 2013. The company was incorporated in 2006 and is based in San Jose, California.

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 applications and educational content, often in partnership with curriculum developers and educational publishers. Additionally, zSpace may engage in service agreements for installation, support, and training, further contributing to their earnings. Strategic partnerships with schools, universities, and corporations enhance their market reach and drive sales, while ongoing maintenance contracts provide a steady stream of recurring income.

zSpace, Inc. Financial Statement Overview

Summary

zSpace, Inc. faces significant financial challenges with declining revenues, high operational losses, and negative equity. The gross profit margin is relatively strong, but the overall financial health is concerning due to persistent losses, high leverage, and reliance on external financing.

Income Statement

zSpace, Inc. shows declining revenue growth with a revenue decrease of 13.22% from 2023 to 2024. The gross profit margin is 40.86% for 2024, which is relatively strong, but the company is deeply unprofitable with a negative net profit margin of -54.66%. Additionally, EBIT and EBITDA margins are both significantly negative, indicating operational challenges.

Balance Sheet

The balance sheet reflects financial instability with negative stockholders' equity of -$14.69 million in 2024, suggesting more liabilities than assets. The debt-to-equity ratio is not meaningful due to negative equity. High leverage and negative equity raise concerns about financial solvency.

Cash Flow

Cash flows show negative operating and free cash flows in 2024, indicating cash outflows from operations. The free cash flow to net income ratio is not meaningful due to negative values. However, financing cash inflows suggest reliance on external funding.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 0.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZSPC, the sentiment is Neutral. The current price of 0.52 is above the 20-day moving average (MA) of 0.49, below the 50-day MA of 0.58, and below the 200-day MA of 3.13, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 49.19 is Neutral, neither overbought nor oversold. The STOCH value of 59.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZSPC.

zSpace, Inc. 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%
TACT	51 Neutral	$41.36M	-5.09	-23.00%	―	8.27%	-308.63%
KTCC	50 Neutral	$28.78M	-2.49	-9.78%	―	-20.03%	-485.19%
UAVS	49 Neutral	$74.04M	-0.40	-110.92%	―	-6.34%	98.60%
SCKT	47 Neutral	$8.38M	-2.90	-17.53%	―	-13.01%	-65.20%
EBON	46 Neutral	$22.51M	-1.16	-7.04%	―	154.52%	47.31%
ZSPC	42 Neutral	$15.97M	-0.55	―	―	-24.20%	1.31%

zSpace, Inc. Corporate Events

zSpace Amends Convertible Note Terms to Increase Flexibility

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 share of common stock, subject to customary adjustments, and easing certain equity-related conditions that govern the company’s ability to make installment payments in stock. Specifically, the company lowered the minimum required volume-weighted average price of its common stock over the prior 20 trading days for satisfying “Equity Conditions” from $0.75 to $0.30, while leaving all other terms of the note in place, a move that provides the company more flexibility to service the note with equity at lower share prices and may increase potential dilution for existing shareholders.

The most recent analyst rating on (ZSPC) stock is a Sell with a $0.47 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.

zSpace, Inc. Faces Nasdaq Non-Compliance Notice

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 regain compliance or face potential delisting, and it is actively monitoring its stock price while evaluating options to meet Nasdaq’s criteria. Additionally, as part of a restructuring initiative, zSpace reduced its board size from seven to five directors, with Angela Prince and Pankaj Gupta stepping down on December 9, 2025, without any disputes. The board also adjusted its committee sizes and leadership roles accordingly.

The most recent analyst rating on (ZSPC) stock is a Hold with a $0.51 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.

zSpace, Inc. Faces Nasdaq Non-Compliance Notice

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 achieving a market value of $35 million or more for at least 10 consecutive business days. Failure to comply may lead to delisting, although the company can appeal. zSpace, Inc. is actively monitoring its market value and evaluating options to meet Nasdaq’s listing criteria.

The most recent analyst rating on (ZSPC) stock is a Hold with a $0.37 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.

zSpace, Inc. Reports Q3 2025 Financial Results

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 from $14.2 million in the previous year, the company saw a gross margin expansion of over 640 basis points. Key developments include the deployment of AR/VR learning platforms in Danbury Public Schools and a partnership with GEMS Education in Dubai, expanding zSpace’s global reach. The company continues to face macroeconomic challenges and funding uncertainty but remains committed to delivering innovative learning solutions and long-term shareholder value.

The most recent analyst rating on (ZSPC) stock is a Buy with a $3.00 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.

zSpace Transfers Stock Listing to Nasdaq Capital Market

On October 20, 2025, zSpace, Inc. announced the transfer of its common stock listing from the Nasdaq Global Market to the Nasdaq Capital Market, effective October 16, 2025. This strategic move allowed zSpace to regain compliance with Nasdaq’s listing requirements, aligning better with its business profile and growth-stage status. The transfer is expected to provide a solid foundation for sustained compliance and support the company’s growth initiatives, including international expansion and the success of its Career Coach AI platform.

The most recent analyst rating on (ZSPC) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.

zSpace, Inc. Amends Convertible Note Terms

On October 15, 2025, zSpace, Inc. amended its Senior Secured Convertible Note with an institutional investor, reducing the ‘Floor Price’ of its common stock from $1.98 to $0.60 per share and adjusting other equity conditions. This amendment could potentially impact the company’s financial flexibility and stock performance. Additionally, the company held its 2025 annual meeting of stockholders, where all five proposals, including the election of directors and ratification of the audit firm, were approved, reflecting strong shareholder support and potentially influencing future governance and operational strategies.

The most recent analyst rating on (ZSPC) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on zSpace, Inc. stock, see the ZSPC Stock Forecast page.