Datasea (DTSS) AI Stock Analysis

• Market Cap: $9.86M
• Dividend Yield: N/A
• Average Volume (3M): 47.00K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.95
• Revenue Growth: 68.56%
• EPS Growth: 89.48%
• Country: US
• Employees: 36
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.02
• Shares Outstanding: 8,570,713
• 10 Day Avg. Volume: 75,768
• 30 Day Avg. Volume: 47,002
• PEG Ratio: 0.03
• Price to Book (P/B): 4.34
• Price to Sales (P/S): 0.18
• P/FCF Ratio: -1.99
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 2.74
• Enterprise Value/Ebitda: -5.14
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: $1.50 ▲(80.72% Upside)

The score is held down primarily by very weak financial performance (losses, high leverage, and negative operating/free cash flow). Technicals provide only partial support due to improving short-term momentum but a weaker longer-term trend and near-overbought readings, while valuation is constrained by negative earnings and no dividend data.

Positive Factors

Strategic shift to high-margin offerings

Management states the company intentionally shifted toward high‑value, technology‑driven businesses (5G+AI multimodal solutions). This strategic reorientation can structurally raise average margins and diversify revenue away from low‑margin services, supporting steadier profit quality over months.

Partnerships and commercialization plans

Confirmed collaborations and an 18‑month execution plan with partners indicate concrete commercialization pathways. Enduring partnerships and execution roadmaps increase the likelihood of converting R&D into recurring product or solution revenues and support sustainable market entry in adjacent sectors.

Improving gross profit and margin

Material gross margin improvement and substantial YoY gross profit growth reflect early success in raising profit quality via mix shifts. If sustained, these margin gains support longer‑term cash generation improvements and validate the strategic pivot toward higher‑value offerings.

Negative Factors

Weak overall financial performance

Persistent negative net and EBIT margins and reported revenue decline indicate structural profitability issues. Ongoing losses drain equity and limit reinvestment capacity, making it harder to scale new initiatives without improving core profitability or securing external capital.

High leverage and low equity ratio

Significant leverage raises refinancing and interest expense risk, constraining strategic flexibility. A low equity ratio reduces the firm’s capacity to absorb shocks or fund growth organically, increasing the probability of dilution or distressed financing in adverse scenarios.

Negative operating and free cash flow

Sustained negative operating and free cash flows undermine the company’s ability to fund operations, R&D, and commercialization without external financing. Chronic cash burn elevates solvency risk and can force dilutive equity raises or costly debt, impeding long‑term execution.

Datasea Business Overview & Revenue Model

Company Description

Datasea Inc., through its subsidiaries, provides smart security solutions in the People's Republic of China. It develops big data security and smart 3D security platforms, safe campus security systems, scenic area security systems, and public community security systems, as well as epidemic system. The company offers its smart security solutions primarily to schools, tourist or scenic attractions, and public communities. It also provides 5G messaging and smart payment solutions. The company was formerly known as Rose Rock, Inc. and changed its name to Datasea Inc. in October 2015. Datasea Inc. was incorporated in 2014 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes Money

Datasea generates revenue through multiple streams, primarily by offering subscription-based data analytics services and cloud solutions to businesses seeking to leverage big data for operational efficiency. Additionally, the company earns income through consulting services that help clients implement AI-driven strategies. Significant partnerships with technology firms and enterprises enhance its market presence and provide avenues for collaborative projects, further contributing to its revenue. The company may also explore licensing its proprietary technologies, which could serve as an additional revenue source.

Datasea Financial Statement Overview

Summary

Weak fundamentals across statements: declining revenue (down >10% TTM), negative EBIT and net margins, high leverage (elevated debt-to-equity) with negative ROE, and negative operating/free cash flow indicating poor cash generation and financial risk.

Income Statement

Datasea's income statement reveals significant challenges, with negative net and EBIT margins indicating ongoing profitability issues. The gross profit margin is low, and revenue has declined by over 10% in the TTM period, suggesting a struggle to maintain sales momentum. The company needs to address its cost structure and improve revenue generation to enhance profitability.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which poses financial risk. The negative return on equity highlights the company's inability to generate profits from shareholder investments. The equity ratio is low, suggesting limited financial stability. Improving equity and reducing debt are critical for financial health.

Cash Flow

Cash flow analysis indicates severe issues, with negative operating and free cash flows. The free cash flow growth is negative, and the operating cash flow to net income ratio is unfavorable, reflecting cash generation challenges. The company must enhance cash flow management to support operations and growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	64.35M	71.62M	23.98M	3.64M	17.08M	175.14K
Gross Profit	3.42M	2.44M	474.11K	135.48K	955.67K	94.00K
EBITDA	-1.82M	-3.94M	-11.63M	-7.48M	-6.66M	-4.66M
Net Income	-3.32M	-5.08M	-11.38M	-9.48M	-6.52M	-4.65M
Balance Sheet
Total Assets	4.66M	6.74M	3.29M	2.75M	3.76M	3.90M
Cash, Cash Equivalents and Short-Term Investments	679.73K	620.81K	181.26K	19.73K	164.22K	49.68K
Total Debt	173.06K	2.67M	1.22M	2.15M	571.37K	2.78M
Total Liabilities	4.56M	3.79M	3.60M	6.33M	2.16M	3.82M
Stockholders Equity	92.97K	2.95M	-236.75K	-3.52M	2.45M	319.65K
Cash Flow
Free Cash Flow	-804.15K	-6.46M	-6.57M	-3.22M	-6.24M	-4.12M
Operating Cash Flow	-762.73K	-2.37M	-6.40M	-3.14M	-5.14M	-3.95M
Investing Cash Flow	-5.59M	-4.09M	-167.96K	-113.13K	-1.13M	-168.69K
Financing Cash Flow	6.25M	6.95M	6.84M	3.11M	6.38M	2.45M

Datasea Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.83
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DTSS, the sentiment is Neutral. The current price of 0.83 is below the 20-day moving average (MA) of 0.98, below the 50-day MA of 1.06, and below the 200-day MA of 1.79, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 54.75 is Neutral, neither overbought nor oversold. The STOCH value of 51.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DTSS.

Datasea Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BNAI	50 Neutral	$111.08M	-4.26	-218.30%	―	-24.72%	53.60%
BLIN	49 Neutral	$9.96M	-3.16	-25.73%	―	0.16%	-36.86%
DTSS	44 Neutral	$9.86M	-2.57	-93.31%	―	68.56%	89.48%
RVYL	43 Neutral	$6.30M	-0.12	-993.23%	―	-44.25%	82.71%
MSAI	42 Neutral	$15.28M	-0.76	-103.97%	―	―	―
CETX	41 Neutral	$13.24M	>-0.01	-415.08%	―	16.50%	―