snwskaiz,
I'm not knowledgable about the Z Drive particularly, but any time you have a transmission between the motor and the prop, you lose some power due to "transmission loss". Basically, if you aren't familiar, a direct drive would be direct coupling between the motor and the prop shaft. The Z drive has gearing inside the outboard drive between the motor and the prop shaft. I don't remember the exact physics behind it, but any gear is not 100% efficient with power transfer and has an efficiency rating associated with what percent of power is transferred from the input shaft to the output shaft.

So, for highest speed, you want a "direct drive" motor coupled directly to the prop shaft. I have considered the Z drive for scale accuracy on my Scarab, but I do expect to lose some power on it. And Z drives are pretty expensive for a cheap hobbyist like me....