I read the zdc update this morning and thought it sounded great . Then the stock drops like a rock…what did I miss? What’s your take on the dip and company update ?
Thanks ,
Shane
ZDC today announced a corporate updated reflecting on its key milestones in 2025 and expectations for 2026. It noted that in Q1 2026, it aims to achieve aggressive sales team growth in Canada and the US, and as of December 31, 2025, it achieved 108% year-over-year growth in its MobileyeZ fleet. It increased floor space by 50% in its new Houston manufacturing facility, and overall continues to see robust demand for its mobile security solutions. It did announce that 25,000 Restircted Share Units (RSUs) were granted to an officer, but this represents a very small (.03%) piece of the overall company.
We did not see anything concerning in its press release, and the stock also saw a drawdown in its previous earnings in November, after what were considered generally positive results.
Its growth rate and continued expansion plans are impressive, but even after its 17% decline today, it does trade at a high valuation of 157X forward earnings. We think a lot of today's move is due to profit-taking and investors concerns that valuation was extended, despite continued strong sales growth.
It continues to be in an uptrend, and we think that based on its high valuation levels, price could decline further, but growth is still strong and we view this as mostly due to valuation concerns. Overall, we would prefer to hold here and wait for the dust to settle to see where the price lands before considering adding to a position or initiating a position here.