GDS Holdings (GDS) AI Stock Analysis

• Market Cap: $7.06B
• Dividend Yield: N/A
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 59.5
• Beta (1Y): 1.46
• Revenue Growth: 1.95%
• EPS Growth: N/A
• Country: US
• Employees: 2,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.45
• Shares Outstanding: 200,928,820
• 10 Day Avg. Volume: 1,892,684
• 30 Day Avg. Volume: 1,538,633
• PEG Ratio: -0.12
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 3.08
• P/FCF Ratio: -24.18
• Enterprise Value/Market Cap: 2.05
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 5.67
• Enterprise Value/Ebitda: 2.43
• 1Y Price Target: $42.87
• Price Target Upside: 23.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $35.00 ▲(1.10% Upside)

GDS Holdings' overall stock score is primarily influenced by its strong earnings call performance, highlighting growth in AI-driven demand and successful capital access. However, financial performance is weighed down by declining revenue growth and high leverage, and the stock's high valuation poses a risk. Technical indicators suggest a neutral to slightly bearish trend, further impacting the score.

Positive Factors

AI-Driven Demand

The significant AI-related demand positions GDS to capitalize on the growing need for AI infrastructure, ensuring long-term revenue growth and market relevance.

Successful C-REIT IPO

The successful C-REIT IPO enhances GDS's capital access, supporting future expansion and financial flexibility, crucial for sustaining growth in the competitive data center market.

Revenue and EBITDA Growth

Consistent revenue and EBITDA growth reflect GDS's robust business model and operational efficiency, underpinning its ability to maintain competitive market positioning.

Negative Factors

High Leverage

High leverage can strain GDS's financial flexibility and increase vulnerability to economic downturns, potentially impacting long-term stability and growth.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests challenges in cash generation, which may hinder GDS's ability to fund operations and invest in future growth initiatives.

Subdued New Bookings

Subdued new bookings could limit GDS's revenue growth potential, impacting its ability to maintain momentum and capitalize on market opportunities.

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 primarily through colocation services, wherein customers rent space, power, and cooling for their servers within GDS's data centers. This constitutes a significant portion of their revenue model. Additionally, GDS earns income from managed services, which include IT support and infrastructure management. The company also benefits from interconnection services that facilitate connectivity between customers and their partners. Strategic partnerships with major cloud providers and technology firms enhance GDS's market positioning, providing additional growth opportunities. The increasing demand for digital transformation and cloud services in China further fuels GDS's revenue streams, contributing to its overall financial performance.

GDS Holdings Financial Statement Overview

Summary

GDS Holdings demonstrates strong profitability with a high net profit margin and return on equity. However, the company faces challenges with declining revenue growth and high leverage. Cash flow management is a concern, with negative free cash flow growth and low cash flow ratios. The company needs to address revenue growth and leverage to improve its financial health.

Income Statement

GDS Holdings shows a strong net profit margin of 41.56% in TTM, indicating high profitability. However, the revenue growth rate is negative, suggesting a decline in sales. The gross profit margin is moderate at 22.77%, and the EBIT margin is healthy at 21.58%. Overall, while profitability is strong, the declining revenue growth is a concern.

Balance Sheet

The debt-to-equity ratio is high at 1.88, indicating significant leverage, which poses a risk. Return on equity is strong at 20.16% in TTM, reflecting efficient use of equity. However, the equity ratio is moderate, suggesting a balanced asset structure. The high leverage is a potential risk despite strong ROE.

Cash Flow

The free cash flow growth rate is negative, and free cash flow to net income ratio is -0.73, indicating cash flow challenges. Operating cash flow to net income ratio is low at 0.36, suggesting limited cash generation relative to net income. Overall, cash flow management appears weak, with negative free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.20B	10.32B	9.96B	9.33B	7.82B	5.74B
Gross Profit	2.55B	2.22B	1.92B	1.94B	1.78B	1.55B
EBITDA	5.97B	4.51B	1.36B	4.19B	3.23B	2.33B
Net Income	5.61B	3.43B	-4.29B	-1.27B	-1.19B	-669.21M
Balance Sheet
Total Assets	78.61B	73.65B	74.45B	74.81B	71.63B	57.26B
Cash, Cash Equivalents and Short-Term Investments	13.44B	7.87B	7.71B	8.61B	9.97B	16.26B
Total Debt	46.96B	44.46B	47.99B	44.68B	37.79B	24.63B
Total Liabilities	51.83B	49.98B	54.32B	50.63B	47.10B	31.69B
Stockholders Equity	26.67B	23.54B	19.96B	24.07B	24.47B	25.57B
Cash Flow
Free Cash Flow	-766.33M	-1.32B	-4.19B	-4.95B	-8.50B	-7.70B
Operating Cash Flow	3.31B	1.94B	2.07B	2.86B	1.20B	320.89M
Investing Cash Flow	-3.68B	-8.76B	-6.33B	-11.27B	-13.69B	-9.38B
Financing Cash Flow	14.26B	17.06B	3.14B	4.86B	8.12B	20.14B

GDS Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 34.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 34.62 is above the 20-day moving average (MA) of 32.37, below the 50-day MA of 35.10, and above the 200-day MA of 32.03, indicating a neutral trend. The MACD of -0.31 indicates Negative momentum. The RSI at 56.52 is Neutral, neither overbought nor oversold. The STOCH value of 93.90 is Negative, 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	―	―	21.23%	―	1.94%	26.15%
KD	64 Neutral	$5.92B	15.27	35.51%	―	-1.90%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDS	58 Neutral	$7.06B	59.45	5.25%	―	1.95%	―
DXC	58 Neutral	$2.34B	6.64	12.33%	―	-4.13%	2143.48%
VNET	57 Neutral	$2.39B	―	-9.25%	―	21.15%	85.96%
CNDT	44 Neutral	$307.31M	―	-15.87%	―	-12.45%	-142.77%

GDS Holdings Corporate Events

GDS Holdings Reports Strong Q3 2025 Financial Performance

GDS Holdings Limited announced its financial results for the third quarter of 2025, reporting a 10.2% year-over-year increase in net revenue to RMB2,887.1 million and a net income of RMB728.6 million, reversing a net loss from the previous year. The company highlighted its strategic execution and strong performance, driven by the increasing demand from AI and the successful ramp-up of its data centers, which contributed to a significant gain on deconsolidation of subsidiaries and improved financial flexibility for future growth.