Education
About Us
Working with TipRanks
Follow Us
TSS (TSSI)
NASDAQ:TSSI
Top Page
TSS
(NASDAQ:TSSI)
Select Model
Select Model
Rating:46Neutral
Price Target:
$10.50
▼(-37.83% Downside)
TSSI's overall stock score is primarily impacted by its financial challenges and bearish technical indicators. Despite a positive outlook from the earnings call, the company's current financial performance and valuation concerns weigh heavily on the score. The stock's technical analysis suggests bearish momentum, further contributing to the lower score.
Positive Factors
Systems integration growth
Consistent 20% growth in systems integration reflects durable demand for AI-enabled infrastructure and higher-margin integration services. This segment expansion supports repeatable project pipelines, strengthens customer relationships, and underpins sustainable revenue diversification over the next several quarters.
Balance sheet capital raise
A $113M equity raise materially improves liquidity and funds strategic investments in AI, edge computing, and modular data centers. Stronger capital position reduces short-term funding risk, enables targeted capex and M&A, and provides flexibility to execute growth initiatives over the medium term.
Improved leverage
A lower debt-to-equity ratio (0.35) signals better leverage management and greater financial flexibility. Reduced leverage improves capacity for investment, lowers interest burden risk, and enhances the company's ability to withstand cyclical headwinds while pursuing strategic growth over coming quarters.
Negative Factors
Negative operating and free cash flow
Sustained negative operating and free cash flow indicates structural cash-generation shortfalls. This limits the firm's ability to self-fund growth, increases reliance on external financing, and raises vulnerability to liquidity shocks, constraining investment and margin-improvement plans over the medium term.
Revenue decline and margin pressure
A >10% revenue decline coupled with falling gross margins points to lasting demand or pricing pressure and potential cost control weaknesses. Margin erosion reduces operating leverage, making it harder to convert future revenue growth into sustainable earnings and free cash flow over multiple quarters.
Operational issues at new facility
Operational delays and unabsorbed electricity costs at the new Georgetown facility impede capacity realization for high-performance and chip-focused customers. Such execution gaps can postpone revenue recognition, elevate unit costs, and slow margin recovery, affecting scalability for AI infrastructure work.
TSS (TSSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$297.39M
Dividend YieldN/A
Average Volume (3M)1.19M
Price to Earnings (P/E)55.1
Beta (1Y)4.17
Revenue Growth91.66%
EPS Growth7.52%
CountryUS
Employees161
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.06
Shares Outstanding28,845,037
10 Day Avg. Volume1,719,027
30 Day Avg. Volume1,189,736
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)36.69
Price to Sales (P/S)1.77
P/FCF Ratio38.44
Enterprise Value/Market Cap0.75
Enterprise Value/Revenue0.95
Enterprise Value/Gross Profit7.69
Enterprise Value/Ebitda21.44
Forecast
1Y Price Target
$15.00Price Target Upside-11.19% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
TSS Business Overview & Revenue Model
Company DescriptionTSS, Inc. provides services for the planning, design, deployment, maintenance, and refurbishment of end-user and enterprise systems, including the mission-critical facilities in the United States. The company operates through two segments, Facilities and Systems Integration. It offers a single source solution for enabling technologies in data centers, operations centers, network facilities, server rooms, security operations centers, communications facilities, and the infrastructure systems. The company also provides technology consulting, design and engineering, project management, systems integration, systems installation, facilities management, and IT procurement and reseller services. It serves IT OEM equipment, technology, and service companies; private sector businesses; and government or commercial end users. The company was formerly known as Fortress International Group, Inc. and changed its name to TSS, Inc. in June 2013. TSS, Inc. was incorporated in 2004 and is headquartered in Round Rock, Texas.
How the Company Makes MoneyTSSI generates revenue through multiple streams, primarily by providing software licensing and subscription services for its proprietary network management and cybersecurity solutions. Additionally, the company earns income from consulting services, where it advises clients on IT infrastructure optimization and compliance with data protection regulations. TSSI also engages in strategic partnerships with hardware manufacturers and telecommunications providers, which allow it to bundle its software services with their products, thereby creating additional sales opportunities. Furthermore, the company benefits from recurring revenue through maintenance and support contracts, ensuring ongoing customer engagement and a steady cash flow.
TSS Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant year-to-date growth and strategic investments positioning the company for future expansion, particularly in AI and high-performance computing infrastructure. However, challenges such as third-quarter revenue declines, operational issues at the new facility, and impacts from the government shutdown were notable. The company remains optimistic with a strong outlook for future growth.Q3-2025 Updates
Positive Updates
Exceptional Year-to-Date Growth
Revenues up 88% and adjusted EBITDA up 59% compared to the same period last year, with positive cash flow from operations of $18.5 million.
Systems Integration Business Growth
20% revenue growth in the Systems integration segment driven by increasing demand for AI-enabled infrastructure.
Strategic Investments and Expansion
Opened a new facility in Georgetown to meet growing demand, with enhanced electrical capacity to support next-generation chip technology.
Positive Financial Position
Raised $113 million from a stock offering, reinforcing the balance sheet and positioning the company for strategic investments.
Strong Future Outlook
Expecting another record year in 2026 with initial guidance of 40% to 50% organic EBITDA growth.
Negative Updates
Third Quarter Revenue Decline
Third quarter revenues were down year-over-year primarily due to lower revenues from procurement services.
Operational Challenges in New Facility
Delays in ramping up rack integration volumes due to unforeseen operational requirements and process improvements needed at the new facility.
Impact of Government Shutdown
Procurement services impacted by the government shutdown, leading to uncertainty in deal closures and a cautious Q4 forecast.
Facilities Management Revenue Drop
Revenues in the Facilities management segment declined 19% year-over-year, although there was a sequential increase.
Increased Costs and Expenses
Higher SG&A expenses, primarily due to increased headcount and noncash stock compensation, as well as significant unabsorbed electricity costs.
Company Guidance
During the TSS, Inc. third-quarter 2025 earnings call, the company reported a significant 88% increase in revenue and a 59% rise in adjusted EBITDA for the first nine months of 2025 compared to the previous year, driven largely by growth in their systems integration segment. Despite a year-over-year decrease in third-quarter revenue to $41.9 million, primarily due to variability in procurement services, the company remains optimistic. The procurement services segment, which primarily serves the Department of Defense, contributed over $30 million in revenue for the quarter, although the government shutdown impacted deal processing. Systems integration revenue grew 20%, with the company investing in infrastructure and personnel to meet increasing demand for AI-enabled infrastructure. Facilities management revenue, representing 4% of total revenue, declined 19% year-over-year but increased 7% sequentially. TSS anticipates a strong rebound in adjusted EBITDA in Q4, with full-year 2025 projected EBITDA growth of 50% to 75%. Looking ahead, TSS expects 40% to 50% organic EBITDA growth in 2026, supported by strategic investments and potential acquisitions in AI, edge computing, and modular data centers.TSS Financial Statement Overview
Summary
TSSI faces financial challenges with declining revenues and profitability margins, coupled with cash flow difficulties. Despite some improvement in leverage, the overall financial health requires strategic interventions to enhance revenue growth, operational efficiency, and cash flow stability.Income Statement
The income statement shows a mixed performance. While the company has managed to maintain a positive net profit margin of 2.08% in the TTM, it has experienced a significant revenue decline of 10.72%. Gross profit margins have also decreased over time, indicating potential cost management issues. The EBIT and EBITDA margins are relatively low, suggesting limited operational efficiency.45
Neutral
Balance Sheet
The balance sheet reflects moderate financial stability. The debt-to-equity ratio has improved to 0.35 in the TTM, indicating better leverage management compared to previous years. However, the return on equity has decreased to 21.81%, and the equity ratio is not explicitly provided, which limits a comprehensive assessment of asset financing.50
Neutral
Cash Flow
The cash flow statement reveals significant challenges. The company has a negative operating cash flow and free cash flow in the TTM, with a drastic decline in free cash flow growth. The free cash flow to net income ratio is high, indicating potential cash flow management issues. These factors suggest liquidity concerns that need addressing.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 234.84M | 148.14M | 54.40M | 30.64M | 27.41M | 45.06M |
| Gross Profit | 28.87M | 22.35M | 11.00M | 8.98M | 6.36M | 6.80M |
| EBITDA | 10.36M | 9.48M | 2.07M | 1.30M | -266.00K | 1.02M |
| Net Income | 4.88M | 5.98M | 74.00K | -73.00K | -1.30M | 79.00K |
Balance Sheet | ||||||
| Total Assets | 165.41M | 96.57M | 25.60M | 31.41M | 19.28M | 23.81M |
| Cash, Cash Equivalents and Short-Term Investments | 70.70M | 23.22M | 11.83M | 20.40M | 8.00M | 19.01M |
| Total Debt | 41.35M | 32.71M | 4.32M | 4.78M | 7.61M | 3.19M |
| Total Liabilities | 102.00M | 89.43M | 22.05M | 28.47M | 17.08M | 20.63M |
| Stockholders Equity | 63.41M | 7.14M | 3.55M | 2.93M | 2.20M | 3.18M |
Cash Flow | ||||||
| Free Cash Flow | -42.03M | 6.81M | -8.53M | 14.18M | -10.52M | 9.60M |
| Operating Cash Flow | -3.11M | 15.30M | -8.27M | 14.71M | -10.45M | 10.00M |
| Investing Cash Flow | -38.92M | -8.48M | -257.00K | -536.00K | -64.00K | -396.00K |
| Financing Cash Flow | 71.28M | 4.58M | -40.00K | -1.77M | -504.00K | 733.00K |
TSS Technical Analysis
Neutral
16.89
Price Trends
8.73
Positive
12.98
Negative
15.22
Negative
Market Momentum
0.57
Negative
54.91
Neutral
33.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSSI, the sentiment is Neutral. The current price of 16.89 is above the 20-day moving average (MA) of 9.66, above the 50-day MA of 8.73, and above the 200-day MA of 15.22, indicating a neutral trend. The MACD of 0.57 indicates Negative momentum. The RSI at 54.91 is Neutral, neither overbought nor oversold. The STOCH value of 33.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSSI.
TSS Risk Analysis
TSS disclosed 23 risk factors in its most recent earnings report. TSS reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TSS Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $528.45M | 13.70 | 26.29% | ― | 12.86% | 54.95% | |
65 Neutral | $529.32M | 50.56 | 10.27% | 2.41% | 0.68% | -67.84% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
53 Neutral | $410.81M | ― | -23.73% | ― | 17.44% | 41.97% | |
47 Neutral | $256.85M | -1.62 | -15.87% | ― | -12.45% | -142.77% | |
46 Neutral | $297.39M | 55.09 | 13.73% | ― | 91.66% | 7.52% | |
39 Underperform | $284.25M | -0.27 | -93.23% | 17.14% | 3.67% | 29.09% |
* Technology Sector Average
TSSI
TSS
10.83
-1.19
-9.90%
HCKT
The Hackett Group
19.24
-10.90
-36.16%
XRX
Xerox
2.13
-6.18
-74.37%
CNDT
Conduent
1.61
-2.46
-60.44%
IBEX
IBEX
38.04
15.72
70.43%
TLS
Telos
5.49
2.35
74.84%
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.