ZeroStack (ZSTK) AI Stock Analysis

• Market Cap: $17.56M
• Dividend Yield: N/A
• Average Volume (3M): 79.92K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.75
• Revenue Growth: -22.60%
• EPS Growth: 53.82%
• Country: US
• Employees: 64
• Sector: Healthcare
• Sector Strength: 45
• Industry: Asset Management
• EPS (TTM): -35.32
• Shares Outstanding: 2,430,808
• 10 Day Avg. Volume: 25,949
• 30 Day Avg. Volume: 79,922
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 0.48
• P/FCF Ratio: -1.96
• Enterprise Value/Market Cap: 3.17
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: -11.54
• Enterprise Value/Ebitda: -5.36
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -0.65
• Revenue Forecast (FY): $40.50M

• Rating: 46 Neutral
• Price Target: $7.00 ▼(-0.85% Downside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is primarily held down by weak financial performance: sharp revenue decline, ongoing losses, persistent negative free cash flow, and a significant 2025 increase in debt. Technicals are mixed with neutral momentum but a weak longer-term trend, while valuation offers limited support given the negative P/E and no dividend yield.

Positive Factors

Improving gross margin

A meaningful gross margin improvement in 2025 indicates the business achieved better unit economics or cost control. Sustained margin gains can compound profitability over time, helping absorb fixed costs and shortening the path to operating break-even if revenue stabilizes or returns to growth.

Positive equity buffer

Maintaining positive equity provides a capital buffer that reduces immediate insolvency risk and preserves financial flexibility. This structural strength supports the ability to absorb losses, negotiate financing, and pursue restructuring or strategic initiatives without immediate dilution or distress financing.

Narrowing losses and improved free cash flow

Progress toward smaller operating losses and an improving free cash flow trend is a durable sign the company is reducing cash burn. Continued improvement can lower funding needs, extend runway, and make it easier to reach positive operating cash flow, improving long-term solvency.

Negative Factors

Sharp revenue contraction

A sustained, sharp revenue decline erodes scale and undermines competitive position. Lower top-line volumes reduce operating leverage, pressure margins, and make it harder to cover fixed costs, increasing the time and investment needed to restore sustainable profitability.

Persistent negative operating and free cash flow

Continuous negative operating and free cash flow forces reliance on external financing and heightens refinancing risk. This structural cash deficit limits the company’s ability to reinvest, pursue growth initiatives, or absorb shocks without raising capital, diluting long-term shareholder value.

Dramatic debt increase in 2025

A sharp step-up in debt raises leverage and interest burden, reducing financial flexibility. Higher leverage increases covenant and refinancing risks, and limits strategic options during downturns; if cash generation remains weak, higher debt materially elevates default risk.

ZeroStack Business Overview & Revenue Model

Company Description

ZeroStack Corp. operates as an AI-powered asset management company focused on providing decentralized AI. ZeroStack is focused on providing exposure to decentralized AI through a concentrated digital asset approach structured to generate yield and fee-based income from staking validators, compute power technology companies, and complementary businesses within the $0G ecosystem and across the wider AI landscape.

How the Company Makes Money

Flora Growth generates revenue primarily through the sale of its cannabis and hemp-derived products. The company has multiple revenue streams, including wholesale distribution to retailers, direct-to-consumer sales through e-commerce platforms, and partnerships with other brands for co-branded product lines. Additionally, Flora Growth benefits from its cultivation operations, which enable cost-effective production of high-quality cannabis. Strategic partnerships with established brands and retailers further enhance its market reach and contribute to its earnings. The company also explores opportunities in the international market, which may provide additional revenue avenues.

ZeroStack Financial Statement Overview

Summary

Revenue contraction in 2024–2025 and persistent operating/net losses weigh heavily. While losses narrowed and gross margin improved in 2025, operating and free cash flow remain negative, and the sharp 2025 debt increase raises funding and flexibility risk.

Income Statement

Revenue has been highly volatile: after strong expansion in 2021–2023, it declined in 2024 and then fell sharply again in 2025, signaling a major contraction in the business. Profitability remains weak across the period with consistent operating and net losses; however, the magnitude of losses improved substantially in 2025 versus 2023–2024. Gross margin improved meaningfully in 2025, but the company is still not close to break-even at the operating or net level.

Balance Sheet

The capital structure has weakened: total debt increased dramatically in 2025 and leverage moved higher, though it remains below equity in the latest year. Equity is still positive, but returns to shareholders are negative due to ongoing losses. Overall, the balance sheet shows some capacity to absorb losses, but the sharp step-up in debt increases financial risk and reduces flexibility.

Cash Flow

Cash generation remains a key issue with negative operating cash flow and negative free cash flow every year shown. Free cash flow improved in 2025 versus 2024, but the business is still consuming cash rather than producing it. While cash burn has moderated at times, the lack of sustained positive operating cash flow keeps funding risk elevated, especially alongside the recent increase in leverage.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Mar 2023	Mar 2022
Income Statement
Total Revenue	35.68M	59.51M	76.07M	33.40M	8.98M
Gross Profit	6.29M	12.50M	17.74M	13.25M	2.42M
EBITDA	-8.98M	-15.10M	-45.87M	-17.87M	-20.93M
Net Income	-120.85M	-15.91M	-57.04M	-52.41M	-21.25M
Balance Sheet
Total Assets	130.24M	26.23M	23.63M	80.99M	85.48M
Cash, Cash Equivalents and Short-Term Investments	5.60M	6.02M	4.35M	8.94M	37.61M
Total Debt	53.93M	4.90M	3.67M	3.76M	1.34M
Total Liabilities	59.68M	21.72M	17.22M	24.57M	8.54M
Stockholders Equity	70.55M	4.51M	6.40M	56.82M	77.17M
Cash Flow
Free Cash Flow	-8.80M	-5.17M	-8.56M	-17.23M	-24.63M
Operating Cash Flow	-8.68M	-5.03M	-8.40M	-15.94M	-20.65M
Investing Cash Flow	-3.46M	203.00K	-234.00K	-15.80M	-14.55M
Financing Cash Flow	11.35M	6.49M	3.15M	4.41M	58.11M

ZeroStack Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZSTK, the sentiment is Negative. The current price of 7.06 is below the 20-day moving average (MA) of 8.69, below the 50-day MA of 7.96, and below the 200-day MA of 16.78, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 42.62 is Neutral, neither overbought nor oversold. The STOCH value of 2.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZSTK.

ZeroStack Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
YCBD	48 Neutral	$8.52M	-0.36	-44.42%	―	-1.50%	80.17%
ZSTK	46 Neutral	$17.56M	-0.06	-37.38%	―	-22.60%	53.82%
IXHL	46 Neutral	$45.63M	-5.00	-130.42%	―	-86.05%	24.17%
IMCC	40 Underperform	$3.79M	-0.92	-93.87%	―	-0.74%	81.49%
COSM	40 Underperform	$15.08M	-0.57	-63.82%	―	―	―