Company Overview
ZenaTech, Inc. operates as an enterprise software technology company focused on developing cloud-based software applications based in Canada. The company's portfolio includes specialized solutions for the medical records industry, software for automated facility management and centers, as well as safety and compliance tools. This enterprise falls within the Technology sector and specifically the Software - Infrastructure industry, positioning it to serve businesses requiring scalable digital infrastructure. The company's current market capitalization stands at $135.99M, supported by an annual revenue of $8.40M and a workforce of 30 employees. These valuation and revenue figures indicate a small-cap status, suggesting the company is in a growth phase where market value is driven more by future potential and specific sector positioning than by established historical earnings or massive scale.
Financial Health
The company reported a revenue of $8.40M over the trailing twelve months, yet this generated a net income of -$26,419,976, revealing a significant gap between top-line growth and bottom-line profitability. This substantial negative net income relative to revenue highlights a cost structure where expenses, likely including research and development or administrative overhead, far exceed the gross revenue generated. EBITDA for the period was -$13,601,560, indicating that even before interest and taxes, the core operations are currently unprofitable. Free cash flow stands at -$23,226,480, which signifies that the company is burning cash to fund its operations and growth initiatives, limiting its immediate financial flexibility for external expansion or acquisitions. Despite the negative operating margin of -110.5% and a profit margin of 0.0%, the company maintains a gross margin of 100.0%, suggesting that the cost of goods sold is negligible compared to its sales revenue. The balance sheet shows $19.53M in cash against $32.11M in debt, resulting in a debt-to-equity ratio of 77.92, which indicates a leveraged position where debt obligations exceed equity capitalization. However, the current ratio of 5.42 suggests strong short-term liquidity, as the company holds significantly more current assets than current liabilities to cover immediate obligations. Return on Equity is -100.9% and Return on Assets is -17.6%, metrics that reveal management is currently utilizing shareholder and asset bases to generate losses rather than returns.
Valuation Assessment
The trailing twelve-month P/E ratio is 60.38, while the forward P/E is -14.42, a disparity that implies the market expects earnings to turn positive or improve significantly in the coming period to justify the current stock price. The price-to-book ratio is -11.89, indicating that the market is pricing the stock below its book value per share, a common characteristic for growth companies that have not yet achieved profitability. The price-to-sales ratio is 16.20, suggesting the market is willing to pay a premium for every dollar of sales based on expectations of future growth rather than current earnings power. Additionally, the EV/EBITDA multiple is -11.47, which further reflects the unprofitable nature of the operations and the reliance on non-operating assets or cash to value the enterprise. The stock has traded between a 52-week low of $1.82 and a 52-week high of $7.11, with the current price sitting below the recent highs, reflecting the volatility often seen in small-cap technology firms with negative earnings.
Growth & Income
Revenue growth year-over-year is reported at 1225.3%, demonstrating an explosive expansion in sales volume, whereas earnings growth is N/A due to the lack of positive net income to measure against the prior year. Because the earnings growth rate is not applicable due to negative earnings, the company is not growing earnings faster than revenue in a traditional sense, but rather is scaling revenue while managing costs to eventually reach profitability. The company does not pay dividends, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning all available cash is reinvested into the business operations rather than distributed to shareholders. This reinvestment strategy is typical for early-stage software companies that prioritize funding their cloud-based development and market expansion over providing income to investors. The overall growth and income profile is defined by high revenue expansion and zero income distribution, relying entirely on operational turnaround to generate future value.