Data Storage (DTST) AI Stock Analysis

• Market Cap: $37.72M
• Dividend Yield: N/A
• Average Volume (3M): 64.76K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.50
• Revenue Growth: -20.20%
• EPS Growth: -799.54%
• Country: US
• Employees: 53
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.20
• Shares Outstanding: 7,498,358
• 10 Day Avg. Volume: 66,873
• 30 Day Avg. Volume: 64,763
• PEG Ratio: 1.59
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 1.16
• P/FCF Ratio: -486.43
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 3.54
• Enterprise Value/Ebitda: -302.72
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $5.50 ▲(8.91% Upside)

Data Storage Corporation's overall score reflects strong revenue growth and strategic initiatives, such as the sale of CloudFirst and a new acquisition strategy. However, challenges in profitability, cash flow management, and valuation metrics weigh down the score. The stock's bullish technical indicators are tempered by overbought conditions.

Positive Factors

Revenue Growth

The robust revenue growth rate indicates successful market expansion and increased demand for the company's products and services, supporting long-term business sustainability.

Strategic Acquisitions

The focus on strategic acquisitions in high-value markets like AI and cybersecurity positions the company for sustained growth and competitive advantage.

Strong Cash Position

A strong cash position enhances financial flexibility, enabling the company to invest in growth opportunities and weather economic uncertainties.

Negative Factors

Profitability Challenges

Weak profitability metrics indicate challenges in converting revenue into profit, which may hinder long-term financial health and shareholder returns.

Cash Flow Issues

Negative cash flow suggests difficulties in generating sufficient cash from operations, potentially impacting the company's ability to fund growth initiatives.

Increased SG&A Expenses

Rising SG&A expenses can erode profit margins and indicate inefficiencies in cost management, potentially affecting long-term profitability.

Data Storage Business Overview & Revenue Model

Company Description

Data Storage Corporation provides multi-cloud information technology solutions primarily in the United States. The company offers data protection and disaster recovery solutions; high availability, data vaulting, DRaaS, IaaS, message logic, standby server, support and maintenance and internet solutions. It also provides cybersecurity solutions comprising managed endpoint security with active threat mitigation, system security assessment, and risk analysis services, as well as applications for continuous security and auditing; and voice and data solutions, such as VoIP and data services with fiber optic, coaxial, and wireless networks for businesses to connect from any location. The company offers its solutions and services to businesses in healthcare, banking and finance, distribution services, manufacturing, construction, education, and government sectors. Data Storage Corporation is headquartered in Melville, New York.

How the Company Makes Money

Data Storage generates revenue primarily through the sale of its cloud storage subscriptions, which provide users with scalable storage options based on their needs. Additional revenue streams include licensing fees for its proprietary data management software and consulting services that help businesses optimize their data storage strategies. The company also partners with major tech firms to integrate its solutions into larger enterprise systems, enhancing its market reach and providing bundled services that attract more clients. These partnerships often lead to joint marketing initiatives, further boosting DTST's visibility and sales.

Data Storage Financial Statement Overview

Summary

Data Storage shows strong revenue growth with a TTM revenue growth rate of 93.7%. However, profitability metrics are weak with a negative EBIT and low net profit margin of 0.75%. The balance sheet is stable with low leverage, but cash flow management needs improvement due to negative free cash flow.

Income Statement

Data Storage shows a strong revenue growth trajectory with a TTM revenue growth rate of 93.7%, indicating robust expansion. However, profitability metrics such as the net profit margin and EBIT margin are weak, with the company reporting a negative EBIT and a low net profit margin of 0.75% for TTM. The gross profit margin remains healthy at 43.6%, suggesting efficient cost management at the gross level.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.03, indicating minimal leverage and financial risk. However, the return on equity is negative at -1.40% for TTM, highlighting inefficiencies in generating returns for shareholders. The equity ratio is strong, suggesting a solid capital structure.

Cash Flow

Cash flow analysis reveals challenges with negative free cash flow and a low operating cash flow to net income ratio of 0.19 for TTM. Despite a positive free cash flow growth rate, the negative free cash flow to net income ratio indicates cash flow issues. The company needs to improve its cash generation capabilities to support growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.06M	25.37M	24.96M	23.87M	14.88M	9.32M
Gross Profit	8.81M	11.10M	9.58M	8.08M	6.42M	3.90M
EBITDA	-103.14K	2.11M	1.68M	-2.85M	1.27M	1.48M
Net Income	16.36M	523.21K	381.57K	-4.36M	267.84K	-325.59K
Balance Sheet
Total Assets	47.68M	25.28M	23.30M	24.09M	26.33M	7.75M
Cash, Cash Equivalents and Short-Term Investments	45.76M	12.33M	12.75M	11.30M	12.14M	893.60K
Total Debt	0.00	673.45K	601.47K	1.65M	2.01M	3.27M
Total Liabilities	8.41M	4.11M	3.55M	5.14M	3.72M	5.83M
Stockholders Equity	39.51M	21.42M	19.99M	19.10M	22.72M	2.02M
Cash Flow
Free Cash Flow	-52.81K	-60.27K	2.33M	536.54K	-816.52K	929.61K
Operating Cash Flow	631.68K	1.74M	3.87M	663.80K	-360.69K	1.11M
Investing Cash Flow	-1.36M	-1.74M	-3.85M	-9.14M	-6.42M	-181.07K
Financing Cash Flow	-109.46K	-352.96K	-878.79K	-1.37M	18.02M	-362.57K

Data Storage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DTST, the sentiment is Positive. The current price of 5.05 is above the 20-day moving average (MA) of 4.78, above the 50-day MA of 4.42, and above the 200-day MA of 4.11, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 75.93 is Negative, neither overbought nor oversold. The STOCH value of 85.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DTST.

Data Storage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DTST	67 Neutral	$37.72M	-32.94	-0.97%	―	-20.20%	-799.54%
USIO	67 Neutral	$37.14M	-88.00	-2.06%	―	3.24%	-115.15%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GLE	54 Neutral	$10.25M	-12.79	-15.17%	―	-53.14%	-325.97%
CYCU	52 Neutral	$9.91M	-0.19	-184.82%	―	―	-81.60%
CLPS	43 Neutral	$26.01M	-3.41	-11.94%	―	15.17%	-172.09%

Data Storage Corporate Events

Data Storage unveils 2026 hybrid acquisition growth strategy

On December 18, 2025, Data Storage Corporation released a shareholder letter from CEO Chuck Piluso outlining its 2026 corporate strategy, which is built around a disciplined hybrid acquisition approach focused on consolidating technology-enabled service providers, including managed IT, cybersecurity monitoring, telecom and UCaaS platforms. The company plans to prioritize targets with solid annual recurring revenue, high margins and established customer bases in areas such as compliance-as-a-service, document security and digitization, access-control, healthcare BPO and niche micro-SaaS+ services, while selectively evaluating opportunities in GPU, AI workflow and automation platforms under strict valuation criteria. Management emphasized that this consolidation-led strategy, supported by enhancements to centralized marketing, cross-selling, shared CRM infrastructure and unified operational standards, is intended to deliver stable recurring earnings, lower integration risk and stronger cross-selling potential, positioning Data Storage for long-term value creation once the tender offer process clarifies its available cash.

Data Storage Announces Tender Offer for Shares

On December 8, 2025, Data Storage Corporation announced its intention to commence a tender offer to purchase up to 6,192,990 shares of its common stock at $5.20 per share, totaling up to $32,203,548. This move follows the company’s divestiture of its disaster recovery and CPU cloud hosting services, as it shifts focus towards higher-growth areas. The tender offer provides liquidity options for stockholders and will result in an increased percentage interest for those who do not participate. The company plans to fund the purchase using cash on hand, including proceeds from its recent business sale.

Data Storage Sells Cloud Solutions Business

Data Storage Corporation has repurchased warrants issued in July 2021 for $2,049,388, which were exercisable for 858,750 shares of common stock. This repurchase was triggered by the sale of its cloud solutions business on September 11, 2025, impacting the company’s operations and market positioning.