ZenaTech (ZENA): Valuation Under the Spotlight Following Record Revenue Growth and Global Expansion Moves

ZenaTech (NasdaqCM:ZENA) just reported record revenue growth this quarter, largely fueled by its fast-growing Drone as a Service operations both in the US and internationally. Investors are eyeing the company’s ongoing expansion efforts as well as its growing industry partnerships.

See our latest analysis for ZenaTech.

This string of major announcements, including record-setting revenue growth, new manufacturing sites in the UAE, and high-profile industry partnerships, has put ZenaTech firmly in the market’s spotlight. While the 1-year total shareholder return stands at a remarkable 129.2%, recent momentum has cooled off, with the 30-day share price return at -38.6% and the stock now trading at $4.08. For investors, this marks a sharp but not uncommon shift after a surge as the market reassesses ZenaTech’s risk profile and long-term growth trajectory.

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With ZenaTech’s shares pulling back sharply despite surging revenues and an ambitious expansion strategy, investors are left to wonder whether today’s lower price represents a rare buying opportunity or if the market is already reflecting future growth expectations.

Price-to-Sales of 23.5x: Is it justified?

At a last close of $4.08, ZenaTech’s lofty price-to-sales ratio of 23.5x signals a valuation premium well above its industry peers.

The price-to-sales (P/S) ratio compares the company’s market capitalization to its annual sales, offering a measure suited to high-growth businesses that are not yet profitable. For ZenaTech, a software firm posting rapid top-line expansion but ongoing losses, the P/S ratio reveals how much investors are paying for each dollar of revenue.

That premium stands out. The US Software industry average sits at just 4.9x, and peer companies average 6.6x. ZenaTech’s P/S is startlingly high and suggests the market is pricing in exceptional future growth. According to regression-based analysis, a fair P/S ratio for ZenaTech could be as high as 140.2x. This is a significant gap that implies the market could still move aggressively if forecasts play out.

Explore the SWS fair ratio for ZenaTech

Result: Price-to-Sales of 23.5x (OVERVALUED)

However, persistent net losses and recent share price volatility could quickly dampen investor sentiment if growth projections or profitability timelines fail to materialize as expected.

Find out about the key risks to this ZenaTech narrative.

Build Your Own ZenaTech Narrative

If you want to dig deeper, challenge these perspectives, or run your own numbers, you can easily craft your own analysis in just a few minutes. Do it your way

A great starting point for your ZenaTech research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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