GDS Holdings (GDS) AI Stock Analysis

• Market Cap: $8.53B
• Dividend Yield: N/A
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 2804.8
• Beta (1Y): 1.42
• Revenue Growth: 7.29%
• EPS Growth: N/A
• Country: US
• Employees: 2,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): >-0.01
• Shares Outstanding: 200,928,820
• 10 Day Avg. Volume: 4,194,658
• 30 Day Avg. Volume: 3,050,196
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 0.96
• Enterprise Value/Gross Profit: 4.27
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: $47.20
• Price Target Upside: 12.19% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 70 Neutral
• Price Target: $45.00 ▲(6.96% Upside)

GDS Holdings demonstrates strong financial performance and technical momentum, but is offset by a high P/E ratio suggesting overvaluation. The earnings call provided positive insights, though some challenges remain. The stock's upward trend and strategic achievements support a moderately positive outlook.

Positive Factors

Revenue Growth

Strong revenue and EBITDA growth indicate robust demand for GDS's services, enhancing its market position and financial stability over time.

Strategic Milestones

The successful C-REIT IPO enhances GDS's financial flexibility, allowing it to invest in growth opportunities and improve its competitive edge.

Cash Flow Improvement

Improved cash flow management supports liquidity and operational investments, crucial for sustaining long-term growth and financial health.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting GDS's ability to navigate economic downturns or invest in growth.

AI Demand Uncertainty

Uncertainty in AI demand due to chip supply issues could slow growth in a key market segment, affecting future revenue streams.

Impact of Asset Monetization

Asset monetization could lead to lower growth rates, affecting GDS's ability to maintain its historical growth trajectory and market leadership.

GDS Holdings Business Overview & Revenue Model

Company Description

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. The company was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes Money

GDS 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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 42.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDS, the sentiment is Positive. The current price of 42.07 is above the 20-day moving average (MA) of 36.67, above the 50-day MA of 35.63, and above the 200-day MA of 29.47, indicating a bullish trend. The MACD of 1.71 indicates Negative momentum. The RSI at 65.41 is Neutral, neither overbought nor oversold. The STOCH value of 60.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GDS.

GDS Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WNS	77 Outperform	3.26B	20.31	20.43%	―	1.94%	26.15%
GDS	70 Neutral	$8.53B	2,804.83	1.40%	―	7.29%	―
DXC	65 Neutral	2.50B	6.47	12.05%	―	-4.93%	497.03%
KD	61 Neutral	7.29B	25.03	23.99%	―	-3.44%	―
VNET	61 Neutral	2.79B	570.77	0.92%	―	18.00%	―
CNDT	53 Neutral	431.27M	90.26	2.18%	―	-14.36%	-73.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

GDS Holdings Corporate Events

GDS Holdings Reports Strong Q2 2025 Financial Results and Strategic Milestone

GDS Holdings Limited announced its financial results for the second quarter of 2025, reporting a 12.4% year-over-year increase in net revenue to RMB2,900.3 million and a significant reduction in net loss to RMB70.6 million. The company achieved a gross profit margin of 23.8% and an adjusted EBITDA margin of 47.3%, reflecting strong operational performance and strategic financial management. The successful public offering of their C-REIT on the Shanghai Stock Exchange is a strategic milestone, enhancing their financing flexibility and positioning them to capture new business opportunities driven by AI advancements.

GDS Holdings Announces Financial Reconciliation for H1 2025

On August 20, 2025, GDS Holdings Limited announced a reconciliation between its financial statements prepared under U.S. GAAP and IFRS for the six months ended June 30, 2025. The reconciliation process, reviewed by KPMG, identified material differences in accounting policies and quantified their financial effects. This initiative reflects GDS Holdings’ commitment to transparency and compliance with international accounting standards, potentially impacting its financial reporting and investor relations.