Q: I was just sent this update on the recent ZDC action from a fund manager that follows (and is a shareholder of) ZDC. I thought you might be interested. Feel free to publish it if you think it would be of value to your members.
After a total senseless decline in ZDC shares, let me summarize it for everyone following the group investor call yday. Sidebar, insiders are buying stock and the first filing hit this morning. Mgmt and board all intend to buy more shares. You want to bet against a company that has beaten consensus eight consecutive quarters?
Ring's tower is an off the shelf, hardware offering with no service, monitoring, or installation. It's a Chinese camera, no analytics, no infrared. In fact, it's half the height of the ZDC tower, so it was clearly not designed for large scale commercial, where ZDC is focused. Meaning ZERO overlap.
Amazon now has 20 towers with ZDC and ZDC is the ONLY tower provider to Amazon. In fact, Amazon took two more towers THIS WEEK.
ZDC now has MANY enterprise customers with towers and awaiting orders. Kruger, Home Depot, Circle K, Seven Eleven, Amazon.
The Kroger contract with LVT expires on Jan 31. All indications that this should be ZDC's contract. What happens if you wake up tomorrow to 500-1000 towers ordered by Kroger? The stock would be back at all-time highs in my view
the company was very explicit that they will use the balance sheet this year to fund growth and will be expanding the credit facility with the established accordion. No equity bailout for anyone. Leverage never gets above 2.5x
the stock is trading at 8x 2027 EBITDA for a company growing EBITDA 100% YoY. The most recent takeout in the space was Guarda buying Stealth last year for 21x FY1 EBITDA versus 13x 2026 for ZDC
Simple supply / demand: after the washout yday, 30 investors met with mgmt. ZDC has one of the best registers I have seen for a small cap and many more large LO buyers in the weeds. I am certain that I know who will win the showdown. The AUM for these funds dwarfs the AUM of hedge funds and retail.
Cheers
Scott
After a total senseless decline in ZDC shares, let me summarize it for everyone following the group investor call yday. Sidebar, insiders are buying stock and the first filing hit this morning. Mgmt and board all intend to buy more shares. You want to bet against a company that has beaten consensus eight consecutive quarters?
Ring's tower is an off the shelf, hardware offering with no service, monitoring, or installation. It's a Chinese camera, no analytics, no infrared. In fact, it's half the height of the ZDC tower, so it was clearly not designed for large scale commercial, where ZDC is focused. Meaning ZERO overlap.
Amazon now has 20 towers with ZDC and ZDC is the ONLY tower provider to Amazon. In fact, Amazon took two more towers THIS WEEK.
ZDC now has MANY enterprise customers with towers and awaiting orders. Kruger, Home Depot, Circle K, Seven Eleven, Amazon.
The Kroger contract with LVT expires on Jan 31. All indications that this should be ZDC's contract. What happens if you wake up tomorrow to 500-1000 towers ordered by Kroger? The stock would be back at all-time highs in my view
the company was very explicit that they will use the balance sheet this year to fund growth and will be expanding the credit facility with the established accordion. No equity bailout for anyone. Leverage never gets above 2.5x
the stock is trading at 8x 2027 EBITDA for a company growing EBITDA 100% YoY. The most recent takeout in the space was Guarda buying Stealth last year for 21x FY1 EBITDA versus 13x 2026 for ZDC
Simple supply / demand: after the washout yday, 30 investors met with mgmt. ZDC has one of the best registers I have seen for a small cap and many more large LO buyers in the weeds. I am certain that I know who will win the showdown. The AUM for these funds dwarfs the AUM of hedge funds and retail.
Cheers
Scott
5i Research Answer:
Thank you; anytime AMZN is mentioned as a potential competitor of course sends fear waves through investors. The stock recovered 12% on Thursday follwing its earlier decline.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in AMZN.