Datasea (DTSS) AI Stock Analysis

• Market Cap: $7.11M
• Dividend Yield: N/A
• Average Volume (3M): 47.00K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.93
• 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: -5.40
• Enterprise Value/Market Cap: 2.70
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 5.63
• Enterprise Value/Ebitda: -10.56
• 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: 41 Neutral
• Price Target: $0.79 ▼(-4.46% Downside)

DTSS scores low primarily due to severe financial weakness (losses, declining revenue, high leverage, and negative operating/free cash flow). Technicals add further downside pressure with the stock trading below key moving averages and negative MACD. Valuation offers limited support because losses drive a negative P/E and no dividend yield is available.

Positive Factors

Niche acoustic security expertise

Datasea’s explicit focus on acoustic and communications security technologies represents a durable niche. Specialized expertise and IP in acoustic signal processing can create barriers to entry, support specialized contracts with government/enterprise clients, and anchor long-term product roadmaps.

Strategic BCI & healthcare collaboration

The strategic agreement to explore acoustic enhancements for non-invasive BCI and healthcare robots signals a structural expansion of addressable markets. System integration and engineering validation aim to move technologies toward productization, potentially diversifying revenue beyond security into healthcare applications.

Lean organizational structure

A small headcount suggests a lean cost base and operational agility, which can prolong runway and accelerate iterative R&D. For a specialized tech firm, a compact team can focus capital on core engineering and commercialization efforts, reducing fixed overhead during product development.

Negative Factors

Declining revenue and negative margins

Sustained revenue decline combined with negative net and EBIT margins indicates the business is not yet achieving scalable, profitable commercial traction. Without reversing top-line trends and improving gross and operating margins, long-term viability and reinvestment capacity remain compromised.

High leverage and weak equity base

Significant leverage and a low equity ratio reduce financial flexibility and increase refinancing risk. This structural capital weakness constrains the company’s ability to fund R&D, commercialize products, or absorb setbacks without dilutive financing or costly debt restructuring.

Negative operating and free cash flow

Persistent negative operating and free cash flow undermines the company’s capacity to self-fund growth, productization, and debt servicing. Over the medium term, reliance on external capital raises execution risk, potential dilution, and the chance of disrupted investment in commercialization initiatives.

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

Datasea faces significant financial challenges, with negative net and EBIT margins, high debt-to-equity ratio, and negative cash flows. These issues indicate poor profitability, high leverage, and cash generation difficulties, necessitating urgent financial restructuring.

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: Negative
• Last Price: 0.83
• 50DMA: Negative
• 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 Negative. The current price of 0.83 is below the 20-day moving average (MA) of 0.92, below the 50-day MA of 1.27, and below the 200-day MA of 1.87, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 39.16 is Neutral, neither overbought nor oversold. The STOCH value of 63.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	56 Neutral	$17.14M	-0.66	-218.30%	―	-24.72%	53.60%
BLIN	49 Neutral	$10.00M	-3.17	-25.73%	―	0.16%	-36.86%
CETX	43 Neutral	$22.36M	-0.01	-415.08%	―	16.50%	―
MSAI	42 Neutral	$18.53M	-0.92	-103.97%	―	―	―
DTSS	41 Neutral	$7.11M	-1.85	-93.31%	―	68.56%	89.48%
RVYL	41 Neutral	$5.67M	-0.11	-993.23%	―	-44.25%	82.71%