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Data Storage Corporation (DTST)
NASDAQ:DTST
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Data Storage
(NASDAQ:DTST)
Rating:61Neutral
Price Target:
$4.00
▲(14.61%Upside)
Positive Factors
Market Opportunity
The ongoing migration to the cloud of services built on the IBM Power architecture provides a substantial opportunity for DTST.
Revenue Growth
Strong recurring revenue growth driven by the Cloud Infrastructure and Disaster Recovery segment.
Valuation
Shares trade at a lower multiple compared to a peer group average, indicating potential undervaluation.
Negative Factors
Earnings Performance
Adjusted EBITDA of $0.5M missed the estimate due to lighter revenue.
Gross Margin
Gross margin contracted to 35.4% from 36.0% in the previous year and 50.1% in the previous quarter.
Segment Sales
Equipment and Software segment sales, which are discrete and prone to swings, declined significantly year over year.
Data Storage (DTST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.92M
Dividend YieldN/A
Average Volume (3M)43.03K
Price to Earnings (P/E)135.3
Beta (1Y)1.52
Revenue Growth-4.17%
EPS Growth-72.98%
CountryUS
Employees53
SectorTechnology
Sector Strength79
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.00
Shares Outstanding7,139,893
10 Day Avg. Volume44,565
30 Day Avg. Volume43,028
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.52
Price to Sales (P/S)0.00
P/FCF Ratio18.69
Enterprise Value/Market Cap0.38
Enterprise Value/Revenue0.09
Enterprise Value/Gross Profit0.85
Enterprise Value/Ebitda1.43
Forecast
1Y Price Target
$9.00Price Target Upside157.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Data Storage Business Overview & Revenue Model
Company DescriptionData Storage Corporation (DTST) is a technology company operating in the data management and cloud services sectors. The company provides a range of solutions including data storage, backup, disaster recovery, and cloud hosting services. DTST focuses on delivering secure and reliable data management solutions to businesses across various industries, ensuring data protection and business continuity.
How the Company Makes MoneyData Storage Corporation generates revenue through a subscription-based model for its cloud services, including data backup and disaster recovery solutions. Customers pay recurring fees for access to DTST's secure and scalable cloud infrastructure. The company also earns money through the sale of professional services, such as consulting and system integration, which help clients optimize their data management strategies. Additionally, DTST may have partnerships with technology providers to enhance service offerings, though specific details on partnerships are not available.
Data Storage Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: -12.31%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in core service growth and strategic partnerships, particularly in the UK. However, these positives were balanced by decreases in total revenue and adjusted EBITDA, as well as concerns about the company's equity valuation. The sentiment reflects cautious optimism, with a focus on addressing valuation disconnects and achieving growth targets.Q1-2025 Updates
Positive Updates
Cloud Infrastructure and Disaster Recovery Services Growth
Core Cloud Infrastructure and Disaster Recovery services grew 14% year-over-year, indicating strong demand for these services.
Successful Strategic Partnerships in the UK
Formed strategic relationships with Brightsolid, Megaport, and Pulsant, expanding infrastructure footprint and capabilities in the UK.
Strong Financial Position
Closed the quarter with $11.1 million in cash and marketable securities, maintaining a debt-free status.
Expansion of Global Operations
Operating across 10 global data centers, serving over 400 clients and managing over 600 contracts.
Negative Updates
Decrease in Total Revenue
Total revenue for Q1 2025 was $8.1 million, a decrease of approximately 2% compared to $8.2 million in Q1 2024, primarily due to a decrease in one-time equipment sales.
Decrease in Adjusted EBITDA
Adjusted EBITDA for Q1 2025 was $497,000 compared to $680,000 for Q1 2024, reflecting increased investments and operational expenses.
Disconnect Between Operating Fundamentals and Equity Valuation
Acknowledged a disconnect between the company’s operating fundamentals and its current equity valuation, with the stock price not reflecting business value.
Company Guidance
During the Data Storage Corporation's first quarter 2025 earnings call, the company reported a revenue of $8.1 million, which was a slight decrease from $8.2 million in the same period of 2024 due to reduced onetime equipment sales. However, their core Cloud Infrastructure and Disaster Recovery services demonstrated a robust 14% year-over-year growth. The company maintained a gross profit of $2.86 million and an adjusted EBITDA of $497,000, while closing the quarter with $11.1 million in cash and marketable securities, remaining debt-free. The call highlighted their strategic expansion efforts, particularly in the U.K. via CloudFirst Europe, where they have formed key partnerships to enhance their service offerings. Despite positive operational results, the company acknowledged a disconnect between their stock price and business value, indicating plans to explore strategic alternatives to enhance shareholder value.Data Storage Financial Statement Overview
Summary
Data Storage Corporation shows a stable financial profile with high asset ownership by shareholders, minimal leverage, and positive operating cash flow. However, challenges in cost management and a negative free cash flow highlight areas for improvement.Income Statement
Data Storage showed a stable revenue base with a marginal decline in TTM, achieving a Gross Profit Margin of 43.6% and a Net Profit Margin of 0.8%. While EBIT Margin was negative, the EBITDA Margin remained positive at 5.4%. Notably, the company's revenue growth rate has been slowing, with a recent contraction. The financials indicate a company that maintains profitability despite challenges in cost management.65
Positive
Balance Sheet
The balance sheet remains robust, with a strong Equity Ratio of 80.5%, indicating high asset ownership by shareholders. The Debt-to-Equity Ratio is low at 0.03, reflecting minimal leverage, enhancing financial stability. Return on Equity is modest at 0.9%, suggesting limited profitability relative to investor equity. Overall, the company maintains a conservative financial position with low debt risk.75
Positive
Cash Flow
Cash flows present a mixed picture with a negative Free Cash Flow, although Operating Cash Flow surpasses Net Income, indicating strong operational efficiency. The Free Cash Flow to Net Income Ratio is negative, highlighting potential cash flow challenges. Despite this, the company's cash management remains adept, reflecting a capability to generate cash from operations.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 25.22M | 25.37M | 24.96M | 23.87M | 14.88M | 9.32M | Gross Profit |
| 11.00M | 11.10M | 9.58M | 8.08M | 6.42M | 3.90M | EBIT |
| -226.41K | 79.89K | -168.41K | -1.75M | -767.07K | 348.96K | EBITDA |
| 1.36M | 2.11M | 1.82M | -2.85M | 1.27M | 1.48M | Net Income Common Stockholders |
| 190.19K | 523.21K | 381.57K | -4.36M | 267.84K | -325.59K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 11.11M | 12.33M | 12.75M | 11.30M | 12.14M | 893.60K | Total Assets |
| 26.93M | 25.28M | 23.30M | 24.09M | 26.33M | 7.75M | Total Debt |
| 598.94K | 673.45K | 601.47K | 1.65M | 2.01M | 3.27M | Net Debt |
| -106.62K | -396.65K | -827.26K | -636.32K | -10.13M | 2.38M | Total Liabilities |
| 535.72K | 4.11M | 3.55M | 5.14M | 3.72M | 5.83M | Stockholders Equity |
| 21.70M | 21.42M | 19.99M | 19.10M | 22.72M | 2.02M |
| Cash Flow | Free Cash Flow | ||||
| -550.34K | -60.27K | 2.33M | 536.54K | -816.52K | 929.61K | Operating Cash Flow |
| 958.91K | 1.74M | 3.87M | 663.80K | -360.69K | 1.11M | Investing Cash Flow |
| -654.59K | -1.74M | -3.85M | -9.14M | -6.42M | -181.07K | Financing Cash Flow |
| -237.12K | -352.96K | -878.79K | -1.37M | 18.02M | -362.57K |
Data Storage Technical Analysis
Negative
3.49
Price Trends
3.66
Negative
3.80
Negative
3.88
Negative
Market Momentum
-0.03
Positive
39.57
Neutral
20.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DTST, the sentiment is Negative. The current price of 3.49 is below the 20-day moving average (MA) of 3.79, below the 50-day MA of 3.66, and below the 200-day MA of 3.88, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 39.57 is Neutral, neither overbought nor oversold. The STOCH value of 20.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DTST.
Data Storage Risk Analysis
Data Storage disclosed 33 risk factors in its most recent earnings report. Data Storage reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Data Storage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $36.72M | 11.36 | 19.38% | ― | 3.07% | ― | |
62 Neutral | $11.80B | 10.10 | -7.47% | 2.99% | 7.37% | -8.16% | |
61 Neutral | $24.92M | 135.27 | 0.90% | ― | -4.17% | -72.98% | |
48 Neutral | $29.54M | ― | -14.76% | ― | 24.03% | 49.96% | |
47 Neutral | $25.44M | ― | -1.97% | ― | 5.81% | 55.03% | |
41 Neutral | $12.30M | ― | ― | ― | ― |
* Technology Sector Average
Performance Comparison
DTST
Data Storage
3.49
-2.88
-45.21%
WYY
Widepoint
3.02
0.05
1.68%
USIO
Usio
1.38
-0.26
-15.85%
CLPS
Clps
0.91
0.04
4.60%
TDTH
Trident Digital Tech Holdings Ltd Unsponsored ADR
0.21
-3.77
-94.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.