Data Storage (DTST) AI Stock Analysis

• Market Cap: $36.70M
• Dividend Yield: N/A
• Average Volume (3M): 640.14K
• Price to Earnings (P/E): 199.2
• Beta (1Y): 1.57
• Revenue Growth: -4.17%
• EPS Growth: -72.98%
• Country: US
• Employees: 53
• Sector: Technology
• Sector Strength: 94
• Industry: Information Technology Services
• EPS (TTM): 0.00
• Shares Outstanding: 7,139,893
• 10 Day Avg. Volume: 1,858,704
• 30 Day Avg. Volume: 640,145
• PEG Ratio: -2.02
• Price to Book (P/B): 1.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -44.11
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 2.18
• Enterprise Value/Ebitda: 3.65
• 1Y Price Target: $9.00
• Price Target Upside: 75.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: $5.50 ▲(7.00%Upside)

Data Storage's score is primarily influenced by its strong corporate events and stable financial performance. However, overvaluation concerns and mixed technical indicators weigh down its overall attractiveness.

Positive Factors

Market Opportunity

The ongoing migration to the cloud of services built on the IBM Power architecture provides a substantial opportunity for DTST.

Recurring Revenue

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

Financial 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 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 Corporation makes money through subscription-based revenue models for its cloud services, including disaster recovery and data backup solutions. The company charges clients on a recurring basis, offering tiered service plans that cater to different business needs and sizes. Additional revenue streams include consulting services for data management strategies and the sale of specialized software products. Partnerships with technology providers and resellers further enhance their market reach and contribute to revenue generation.

Data Storage Financial Statement Overview

Summary

Data Storage has a stable but challenging financial situation. While maintaining a robust balance sheet with minimal leverage, the income statement reflects a decline in revenue growth and profitability. Cash flow is operationally efficient, yet free cash flow challenges persist.

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.

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.

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.37M	24.96M	23.87M	14.88M	9.32M
Gross Profit	11.10M	9.58M	8.08M	6.42M	3.90M
EBITDA	2.11M	1.82M	-2.85M	1.27M	1.48M
Net Income	523.21K	381.57K	-4.36M	267.84K	-325.59K
Balance Sheet
Total Assets	25.28M	23.30M	24.09M	26.33M	7.75M
Cash, Cash Equivalents and Short-Term Investments	12.33M	12.75M	11.30M	12.14M	893.60K
Total Debt	673.45K	601.47K	1.65M	2.01M	3.27M
Total Liabilities	4.11M	3.55M	5.14M	3.72M	5.83M
Stockholders Equity	21.42M	19.99M	19.10M	22.72M	2.02M
Cash Flow
Free Cash Flow	-60.27K	2.33M	536.54K	-816.52K	929.61K
Operating Cash Flow	1.74M	3.87M	663.80K	-360.69K	1.11M
Investing Cash Flow	-1.74M	-3.85M	-9.14M	-6.42M	-181.07K
Financing Cash Flow	-352.96K	-878.79K	-1.37M	18.02M	-362.57K

Data Storage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 5.14 is above the 20-day moving average (MA) of 3.85, above the 50-day MA of 3.78, and above the 200-day MA of 3.90, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 72.19 is Negative, neither overbought nor oversold. The STOCH value of 76.75 is Neutral, 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
USIO	64 Neutral	$47.89M	14.81	19.38%	―	3.07%	―
DTST	63 Neutral	$36.70M	199.22	0.90%	―	-4.17%	-72.98%
Sector *	57 Neutral	$894.48M	11.71	-16.27%	2.29%	10.61%	-33.65%
WYY	49 Neutral	$30.42M	―	-14.76%	―	24.03%	49.96%
CLPS	49 Neutral	$26.73M	―	-1.97%	―	5.81%	55.03%
JFU	―	$19.31M	17.43	0.23%	―	―	―
TDTH	41 Neutral	$158.30M	―		―	―	―

Data Storage Corporate Events

Data Storage Sells CloudFirst Assets for $40 Million

On July 11, 2025, Data Storage Corporation entered into an agreement to sell the assets of its subsidiary, CloudFirst Technologies Corporation, to Total Server Solutions Holdings, LLC for $40 million. This divestiture, subject to shareholder approval at the annual meeting on September 10, 2025, aims to accelerate CloudFirst’s growth in a private setting and allow Data Storage to pursue strategic opportunities in high-growth sectors. The transaction will result in CloudFirst joining Performive, backed by Renovus Capital Partners, while Data Storage plans to use the proceeds for a tender offer to repurchase up to 85% of its outstanding shares and invest in sectors like AI-enabled SaaS, cybersecurity, and healthcare automation.

The most recent analyst rating on (DTST) stock is a Buy with a $9.00 price target. To see the full list of analyst forecasts on Data Storage stock, see the DTST Stock Forecast page.