ZeroStack Corp.

Where It Passes

Where It Falls Short

• Cash Flow0% pass✓ 1✗ 11▾

  No clean pass — all 10 investors flag at least one cash flow criterion

  Free Cash Flow Proxy$-119.3M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-5.6M

  ✗LynchPositive and growing

  Operating Cash Flow$-8.7M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-6.66%, ROA=-91.94%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-14.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive0/6 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-83.7%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency0/6 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-5.6M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-9.33%; #3204/4519 (top 70.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -66.6% vs Rev: -23.6%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$-13.68 (2022) -> $-43.49 (2025)

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency0/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-0.5%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/3 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 23.3% -> 4.6%, operating margin -66.2% -> -433.5%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR220.2%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✗ 11▾

  All 8 investors flag ZSTK's efficiency

  Current Ratio0.95

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-346.0%

  ✗Buffett> 10%

  ROIC - WACC-356.0%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)N/A (invested capital <= 0)

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.05 -> 1.01

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.37x -> 0.27x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.95

  ✗Dreman> 1.5

  Return on Invested Capital-1165.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-477.3%; FY2024: ROIC=-107.0%; FY2025: ROIC=-98.5%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest -98.5%)

  ✗SleepROIC > 12% in a majority of years
• Profitability6% pass✓ 3✗ 32▾

  15 of 16 flag ZSTK's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)0/8 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)0/8 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-306.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-433.5% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-119.3M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-1287.0%

  ✗Lynch> 15%

  EBIT / Enterprise Value-402.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-402.4%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-91.94%

  ✗PiotroskiROA > 0

  ROA Change YoY-60.65% -> -91.94% (delta: -31.28%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-6.66%, ROA=-91.94%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY6.1% -> 4.6%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-436.1%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-1287.0%

  ✗Dreman> 12%

  Margin of SafetyP/B=0.1x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-471.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/6 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-598.0%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-1287.0%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-66.2% (2023) -> -433.5% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 23.3% -> 4.6%, operating margin -66.2% -> -433.5%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-297.76%; #5790/6340 (top 91.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+20.88%; #2008/3702 (top 54.2%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-1287.00%; #5177/5226 (top 99.1%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.7540; #5160/5884 (top 87.7%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation8% pass✓ 8✗ 20▾

  12 of 13 flag ZSTK's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio0.1x

  ✓Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-402.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-402.4%, ROC=N/A (invested capital <= 0)

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Book Value per Share0.1x

  ✓Dreman< 1.2x✓Templeton< 1.5x✓SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-1790.8%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-14.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=0.1x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low100% of trailing low ($2.74)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-297.76%; #5790/6340 (top 91.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2314; #4029/6449 (top 62.5%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share0.09x

  ✓SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+246.1%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.6703; #2257/5247 (top 43.0%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-9.33%; #3204/4519 (top 70.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-47.10%; #5061/6202 (top 81.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts14% pass✓ 2✗ 12▾

  Split decision: 12 FAIL · 2 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (3/7)•GreenblattNot ranked✗PiotroskiFAIL (F-Score 2)✗DremanFAIL (2/11)✓MungerPASS (2/4)✗PabraiFAIL (1/3)✗AkreFAIL (2/6)✗MarksFAIL (1/5)✗AckmanFAIL (2/9)✓TempletonPASS (4/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #2348/2370 (Top 99.1%))✗NeffFAIL (1/6)•SchlossNEUTRAL (4/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage42% pass✓ 8✗ 7▾

  7 of 12 flag ZSTK's debt & leverage — Graham, Buffett, Piotroski +4 more

  LT Debt vs Net Current AssetsLT Debt $0.0M vs NCA $-0.6M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.76, IC: -991.4x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.17

  ✓Lynch< 0.33

  Cash - Long-term Debt$2.6M

  ✓LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 38.98%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.95

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.17

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.17

  ✓MungerDebt/Equity < 0.5✓AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-991.4x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.17

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.1746; #1587/4210 (top 37.7%)

  ✗AsnessTop 30% of eligible cross-section