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Data Storage
(NASDAQ:DTST)
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Rating:46Neutral
Price Target:
$3.00
▼(-1.96% Downside)
Action:Reiterated
Date:09/06/26
The score is primarily held down by deteriorating financial performance—sharp revenue contraction, deeply negative operating margins, and ongoing cash burn—despite low leverage. Technicals also reflect a broader downtrend with weak momentum. Valuation appears optically cheap (very low P/E), but earnings quality and execution risk from ongoing losses and acquisition-dependent strategy limit the benefit.
Positive Factors
Debt-free balance sheet
The absence of long-term debt reduces financial risk and interest obligations, while cash and marketable securities provide capacity to fund operations or selected investments. This balance-sheet flexibility is a durable advantage as management evaluates growth opportunities and manages volatility.
Negative Factors
Revenue contraction and operating losses
The sharp revenue decline and deeply negative operating margins indicate that the core business is not currently covering its operating cost base. Unless revenue scale and execution improve materially, these losses can weaken financial resilience and make reported earnings less dependable.
Read all positive and negative factors
Positive Factors
Negative Factors
Debt-free balance sheet
The absence of long-term debt reduces financial risk and interest obligations, while cash and marketable securities provide capacity to fund operations or selected investments. This balance-sheet flexibility is a durable advantage as management evaluates growth opportunities and manages volatility.
Read all positive factors
Data Storage (DTST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.92M
Dividend YieldN/A
Average Volume (3M)16.93K
Price to Earnings (P/E)1.5
Beta (1Y)1.34
Revenue Growth-94.31%
EPS Growth-1884.52%
CountryUS
Employees7
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.95
Shares Outstanding2,337,738
10 Day Avg. Volume10,497
30 Day Avg. Volume16,931
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.91
Price to Sales (P/S)26.93
P/FCF Ratio-11.72
Enterprise Value/Market Cap>-0.01
Enterprise Value/Revenue>-0.01
Enterprise Value/Gross Profit>-0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)-1.02
Revenue Forecast (FY)$1.60M
Data Storage Business Overview & Revenue Model
Company Description
Headquartered in Melville, New York, Data Storage Corporation (DTST) delivers comprehensive multi-cloud information technology services, primarily catering to clients within the United States. The company's offerings encompass a wide range of data...
How the Company Makes Money
DTST generates revenue primarily by selling and implementing data storage and data management solutions for customers. Key revenue streams include (1) product revenue from storage-related hardware and/or software components sold as part of custome...
Data Storage Earnings Call Summary
Earnings Call Date:Aug 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 17, 2026
Earnings Call Sentiment Neutral
The call conveyed constructive progress: recurring-revenue growth at Nexxis, improved gross margins, a debt-free balance sheet, and an active, disciplined M&A strategy enabled by prior CloudFirst proceeds. However, these positives are tempered by a widening net loss, a sizeable increase in SG&A (largely noncash stock compensation), a small absolute revenue base, and reduced immediate liquidity after a substantial share repurchase. Management emphasized discipline and selectivity on acquisitions and provided a near-term timeline for deals, but execution risk and valuation/market skepticism remain.Positive Updates
Revenue Growth from Continuing Operations
Revenue from continuing operations (Nexxis) was $359,000 for Q2 FY2026, up $31,000 or 9.3% year-over-year (from $328,000), driven by new customers and expansion of services.
Negative Updates
Widening Net Loss
Net loss attributable to common shareholders increased to $1.2 million for the quarter versus a $732,000 loss in the prior-year period, reflecting higher SG&A and other expenses.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth from Continuing Operations
Revenue from continuing operations (Nexxis) was $359,000 for Q2 FY2026, up $31,000 or 9.3% year-over-year (from $328,000), driven by new customers and expansion of services.
Read all positive updates
Company Guidance
Management's guidance was disciplined and timeline-driven: Nexxis (continuing operations) posted Q2 revenue of $359K (+$31K, +9.3% YoY vs $328K), gross profit $168K (+$30K, +21.9%; margin 47% vs 42.1% prior), SG&A $1.5M (+$362K, +33.2%) driven by a $328K (+99.1%) rise in noncash stock‑based compensation and $58K (+26.2%) higher professional fees, and a net loss of $1.2M (vs $732K); the company holds ≈$9.3M in cash and marketable securities, has no long‑term debt, sold CloudFirst for $40M (Sept 11, 2025) and used $29.5M of proceeds for a stock tender (Jan 15, 2026). Looking ahead they are evaluating roughly 124 opportunities across AI infrastructure (GPU/sovereign AI), cybersecurity, communications and software, will remain valuation‑conscious (favoring earnouts and cash/stock mixes), and expect to sign nonbinding LOIs in ~40–60 days with a goal to close transactions by year‑end (or, at latest, in the following quarter).Data Storage Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
61
Positive
Cash Flow
27
Negative
| Breakdown | TTM | Mar 2026 | Mar 2025 | Dec 2023 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.45M | 1.38M | 25.37M | 24.96M | 23.87M | 14.88M |
| Gross Profit | 689.87K | 614.32K | 11.10M | 9.58M | 8.08M | 6.42M |
| EBITDA | -4.55M | -3.57M | 2.02M | 1.68M | -3.04M | 1.27M |
| Net Income | 18.06M | 19.20M | 523.21K | 381.57K | -4.36M | 267.84K |
Balance Sheet | ||||||
| Total Assets | 11.13M | 43.02M | 25.28M | 23.30M | 24.09M | 26.33M |
| Cash, Cash Equivalents and Short-Term Investments | 9.28M | 40.99M | 12.33M | 12.75M | 11.30M | 12.14M |
| Total Debt | 0.00 | 0.00 | 673.45K | 601.47K | 1.65M | 2.01M |
| Total Liabilities | 1.03M | 2.34M | 4.11M | 3.55M | 5.14M | 3.72M |
| Stockholders Equity | 10.33M | 40.92M | 21.42M | 19.99M | 19.10M | 22.72M |
Cash Flow | ||||||
| Free Cash Flow | -4.62M | -3.18M | -60.27K | 2.33M | 536.54K | -816.52K |
| Operating Cash Flow | -5.08M | -3.16M | 1.74M | 3.87M | 663.80K | -360.69K |
| Investing Cash Flow | 36.64M | 6.92M | -1.74M | -3.85M | -9.14M | -6.42M |
| Financing Cash Flow | -30.90M | -1.35M | -352.96K | -878.79K | -1.37M | 18.02M |
Data Storage Technical Analysis
Negative
3.06
Price Trends
3.21
Negative
3.51
Negative
3.96
Negative
Market Momentum
-0.07
Positive
42.25
Neutral
28.06
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 3.06 is below the 20-day moving average (MA) of 3.09, below the 50-day MA of 3.21, and below the 200-day MA of 3.96, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 42.25 is Neutral, neither overbought nor oversold. The STOCH value of 28.06 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 34 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $78.36M | -49.64 | -8.20% | ― | 10.40% | -152.86% | |
54 Neutral | $9.32M | 24.97 | 20.19% | ― | -76.15% | -1660.00% | |
46 Neutral | $6.92M | 1.52 | 71.05% | ― | -94.31% | -1884.52% | |
42 Neutral | $31.53M | -4.47 | -11.60% | 16.91% | 8.43% | -395.99% | |
42 Neutral | $11.43M | -0.13 | -70.61% | ― | -43.59% | 76.04% |
* Technology Sector Average
DTST
Data Storage
2.96
-1.57
-34.66%
USIO
Usio
2.75
1.29
88.36%
CLPS
Clps
1.06
0.02
1.92%
VEEA
Veea
1.70
-9.14
-84.32%
CYCU
Cycurion
3.54
-39.53
-91.78%
GLE
Global Engine Group Holding Limited
0.51
-0.25
-32.49%
Data Storage Corporate Events
Executive/Board ChangesShareholder Meetings
Data Storage Shareholders Back Board, Pay and Auditor
Positive
Sep 3, 2026
On September 2, 2026, Data Storage Corporation held its 2026 annual meeting of stockholders, with 1,286,352 of 2,337,738 eligible shares present in person or by proxy, constituting a quorum. Shareholders elected ten directors, including Charles M....
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.