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GDS Holdings Ltd (GDS)
NASDAQ:GDS
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GDS Holdings
(NASDAQ:GDS)
Rating:63Neutral
Price Target:
$36.00
▲(9.89% Upside)
Positive Factors
Demand
Strong order growth for DayOne with significant new commitments in 2Q25, including new orders in Thailand and Finland.
Earnings
Revenue surged 1.4x YoY for DayOne, GDS's international business, driven by rising IT capacity utilized.
Valuation
The anticipated IPO of DayOne is expected to boost GDS's valuation due to its growth potential and long contract durations.
Negative Factors
Chip Supply Concerns
New orders for AI remain restrained amid uncertainty of chip supply in China, according to management.
Financial Performance
Adjusted EBITDA growth guidance for the upcoming fiscal year is slightly below market expectations due to the impact of asset-backed securities.
Market Reaction
The market may have been confused by the de-consolidation of DayOne, which led to lower reported numbers and a negative initial reaction.
GDS Holdings (GDS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.99B
Dividend YieldN/A
Average Volume (3M)2.16M
Price to Earnings (P/E)2355.9
Beta (1Y)1.43
Revenue Growth7.29%
EPS GrowthN/A
CountryUS
Employees2,276
SectorTechnology
Sector Strength84
IndustryInformation Technology Services
Share Statistics
EPS (TTM)>-0.01
Shares Outstanding200,928,820
10 Day Avg. Volume2,610,378
30 Day Avg. Volume2,164,172
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.54
Enterprise Value/Revenue0.96
Enterprise Value/Gross Profit4.27
Enterprise Value/Ebitda1.84
Forecast
1Y Price Target
$45.85Price Target Upside39.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
GDS Holdings Business Overview & Revenue Model
Company DescriptionGDS Holdings Limited is a leading developer and operator of high-performance data centers in China. The company provides a range of services including colocation, cloud computing, and disaster recovery solutions, primarily targeting large enterprises and cloud service providers. GDS operates multiple data centers across key cities in China, offering advanced infrastructure and high reliability to support the growing demand for digital services and data storage in the region.
How the Company Makes MoneyGDS Holdings generates revenue through several key streams, primarily from colocation services where customers rent space, power, and cooling for their IT equipment within the data centers. The company charges fees based on the amount of space and power consumed by its clients. Additionally, GDS earns revenue from cloud services, which include infrastructure as a service (IaaS) offerings that enable customers to deploy and manage their applications in the cloud. The company also benefits from long-term contracts with major clients, ensuring stable cash flow. Strategic partnerships with major technology firms and cloud providers enhance its service offerings and customer base, further contributing to its earnings. Factors such as the increasing demand for data storage, cloud computing growth, and the expansion of internet services in China play significant roles in driving GDS's revenue growth.
GDS Holdings Earnings Call Summary
Earnings Call Date:Aug 20, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 25, 2025
Earnings Call Sentiment Positive
The earnings call presented a solid financial performance with significant revenue and EBITDA growth, successful capital raising, and strategic milestones such as the C-REIT IPO. However, challenges such as AI demand uncertainty due to chip supply issues and the potential impact of asset monetization on future growth were noted.Q2-2025 Updates
Positive Updates
Revenue and EBITDA Growth
GDS Holdings reported a 12.4% increase in revenue and an 11.2% increase in adjusted EBITDA year-on-year for Q2 2025.
Successful Capital Raising
Raised USD 676 million through convertible bonds and equity, strengthening the holdco balance sheet.
C-REIT IPO Success
Completed a major milestone in the onshore asset monetization strategy with C-REIT IPO, with units trading at implied cap rates below 5% on the Shanghai Stock Exchange.
Strong Utilization and Bookings
Gross move-in during Q2 '25 was 20,000 square meters with a utilization rate of 77.5%. Gross new bookings were 23,000 square meters.
DayOne Expansion
DayOne added 246 megawatts of new commitments, bringing the total to over 780 megawatts, and announced a second campus site in Finland.
Negative Updates
AI Demand Uncertainty
AI demand was relatively quiet due to uncertainty of chip supply in China, leading to a 'wait and see' period for AI-driven demand.
EBITDA Margin Decline
Adjusted EBITDA margin for Q2 '25 was 47.3%, slightly lower than 47.8% in Q2 '24.
Impact of Asset Monetization on Future Growth
Future reported revenue and EBITDA growth will be impacted by asset monetizations, with an estimated 6 percentage points lower growth rate.
Company Guidance
During GDS Holdings Limited's Second Quarter 2025 earnings call, significant metrics were highlighted, showcasing the company's robust performance and strategic advancements. Revenue grew by 12.4% and adjusted EBITDA increased by 11.2% year-on-year, with a utilization rate reaching 77.5%. The company successfully raised USD 676 million through convertible bonds and equity, fortifying its balance sheet. A major milestone was achieved with the C-REIT IPO on the Shanghai Stock Exchange, featuring units trading at an implied cap rate below 5%. In Q2 2025, gross move-ins totaled around 20,000 square meters, while gross new bookings reached 23,000 square meters, predominantly from traditional Internet and cloud sectors. GDS secured 246 megawatts of new commitments through its investment in DayOne, bringing total power commitments to over 780 megawatts. Despite a slight decline in MSR per square meter by 1.7% compared to Q2 2024, the company projects continued solid growth, with plans to deliver 35% of its current backlog in the second half of 2025.GDS Holdings Financial Statement Overview
Summary
GDS Holdings shows strong revenue growth and improved profitability margins. However, high leverage and negative free cash flow pose challenges. Positive trends in profitability and cash flow efficiency suggest potential for future financial stabilization and growth.Income Statement
GDS Holdings exhibits strong revenue growth with a notable increase in total revenue from 2024 to TTM (Trailing-Twelve-Months). The gross profit margin remains robust, although the net profit margin is buoyed by a large net income figure in the TTM, which requires careful interpretation. The EBIT and EBITDA margins have improved significantly over the years, indicating enhanced operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects moderate stability with a substantial stockholders' equity base. However, the debt-to-equity ratio is relatively high, suggesting leveraged financial operations. The equity ratio indicates a strong asset base, but the significant amount of total liabilities presents a potential risk factor.65
Positive
Cash Flow
The cash flow statement highlights a substantial increase in operating cash flow, which is a positive indicator of liquidity. The company has managed to improve its free cash flow position from a deficit, though it remains negative in the TTM. The operating cash flow to net income ratio is robust, indicating efficient cash management relative to earnings.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.21B | 10.32B | 9.96B | 9.33B | 7.82B | 5.74B |
| Gross Profit | 2.52B | 2.22B | 1.92B | 1.94B | 1.78B | 1.55B |
| EBITDA | 5.83B | 4.39B | 1.36B | 4.19B | 3.36B | 2.43B |
| Net Income | 4.53B | 3.43B | -4.29B | -1.27B | -1.19B | -669.21M |
Balance Sheet | ||||||
| Total Assets | 73.46B | 73.65B | 74.45B | 74.81B | 71.63B | 57.26B |
| Cash, Cash Equivalents and Short-Term Investments | 7.58B | 7.87B | 7.71B | 8.61B | 9.97B | 16.26B |
| Total Debt | 43.88B | 44.46B | 47.99B | 44.68B | 37.79B | 24.63B |
| Total Liabilities | 49.02B | 49.98B | 54.32B | 50.63B | 47.10B | 31.69B |
| Stockholders Equity | 24.31B | 23.54B | 19.96B | 24.07B | 24.47B | 25.57B |
Cash Flow | ||||||
| Free Cash Flow | -3.45B | -1.32B | -4.19B | -4.95B | -8.50B | -7.70B |
| Operating Cash Flow | 2.81B | 1.94B | 2.07B | 2.86B | 1.20B | 320.89M |
| Investing Cash Flow | -8.53B | -8.76B | -6.33B | -11.27B | -13.69B | -9.38B |
| Financing Cash Flow | 16.88B | 17.06B | 3.14B | 4.86B | 8.12B | 20.14B |
GDS Holdings Technical Analysis
Neutral
32.76
Price Trends
34.11
Negative
29.82
Positive
28.15
Positive
Market Momentum
-0.16
Positive
46.19
Neutral
41.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDS, the sentiment is Neutral. The current price of 32.76 is below the 20-day moving average (MA) of 33.87, below the 50-day MA of 34.11, and above the 200-day MA of 28.15, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 46.19 is Neutral, neither overbought nor oversold. The STOCH value of 41.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GDS.
GDS Holdings Risk Analysis
GDS Holdings disclosed 119 risk factors in its most recent earnings report. GDS Holdings 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 2 New Risks
1.
If GDSH's beneficial ownership in GDSI falls below 50% or cease to have the ability to appoint the majority of the board of directors of GDSI or otherwise ceases to have the control over the management and policies of GDSI, a change of control would be triggered under certain of GDSI's real property leases, customer agreements and/or loan agreements, and the business development, financial condition and future prospects of GDSH and/or GDSI may be materially and adversely affected. Q4, 2023
2.
Our customer agreement commitments are subject to reduction, potential cancellation and non-renewal upon expiry; if renewed, the renewal may be at lower pricing terms or for a lower commitment of utilization. Q4, 2023
GDS Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.23B | 20.11 | 21.23% | ― | 1.94% | 26.15% | |
71 Outperform | $2.57B | 7.07 | 12.60% | ― | -4.93% | 497.03% | |
63 Neutral | $6.99B | 2,355.86 | 1.40% | ― | 7.29% | ― | |
61 Neutral | $35.51B | 8.11 | -11.05% | 1.89% | 8.55% | -8.72% | |
55 Neutral | $2.17B | 410.26 | 1.02% | ― | 18.00% | ― | |
54 Neutral | $440.75M | 90.58 | 2.21% | ― | -14.36% | -73.74% | |
48 Neutral | $7.21B | 26.17 | 26.55% | ― | -3.44% | ― |
* Technology Sector Average
Performance Comparison
GDS
GDS Holdings
32.76
15.54
90.24%
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7.64
4.85
173.84%
WNS
WNS
75.40
18.51
32.54%
CNDT
Conduent
2.79
-0.82
-22.71%
DXC
DXC Technology
14.50
-6.32
-30.36%
KD
Kyndryl Holdings Incorporation
31.77
9.16
40.51%
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.