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TSS Inc (TSSI)
NASDAQ:TSSI
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TSS
(NASDAQ:TSSI)
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Rating:66Neutral
Price Target:
$20.50
▲(14.14% Upside)
TSSI's overall stock score reflects strong revenue growth and operational performance, particularly highlighted in the recent earnings call. Technical indicators support a positive short-term outlook, although valuation concerns due to a high P/E ratio and no dividend yield weigh on the score. Financial performance shows potential for growth but is tempered by high leverage and declining margins.
TSS (TSSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$509.42M
Dividend YieldN/A
Average Volume (3M)2.86M
Price to Earnings (P/E)50.5
Beta (1Y)3.56
Revenue Growth328.80%
EPS Growth339.87%
CountryUS
Employees161
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.06
Shares Outstanding28,364,244
10 Day Avg. Volume3,136,873
30 Day Avg. Volume2,859,714
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 Cap1.47
Enterprise Value/Revenue2.86
Enterprise Value/Gross Profit23.39
Enterprise Value/Ebitda51.71
Forecast
1Y Price Target
$20.50Price Target Upside14.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
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 MoneyTSS generates revenue through multiple streams, primarily focusing on the sale of software licenses, subscription services, and consulting fees. The company charges clients for its proprietary software solutions, which provide essential functionalities for network management and cybersecurity. Additionally, TSS offers subscription-based services that include ongoing support, maintenance, and updates, ensuring a continuous revenue flow. Consulting services, where TSS provides expert advice and implementation strategies for its clients, also contribute significantly to its earnings. The company has established strategic partnerships with major technology firms, enhancing its service offerings and expanding its market reach, which in turn drives revenue growth.
TSS Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue growth and operational success, particularly in procurement and systems integration. The new facility's successful launch positions the company for future growth. However, challenges remain in the facilities management segment and with decreased gross margins. Overall, the positive aspects outweigh the challenges, indicating a strong performance outlook.Q2-2025 Updates
Positive Updates
Record Year-Over-Year Revenue Growth
The company achieved a record revenue growth of 262% year-over-year, increasing from $12.2 million in Q2 2024 to $44 million in Q2 2025.
Procurement Services Expansion
Revenue from procurement services grew by 572% year-over-year to $33 million, driven by increased infrastructure investments to support AI workloads.
Systems Integration Growth
The systems integration segment experienced 91% revenue growth, emphasizing demand for AI-enabled infrastructure.
Successful New Facility Launch
The new 213,000 square foot facility in Georgetown, Texas, is now fully operational, supporting increased operational efficiency and capacity.
Adjusted EBITDA Increase
Adjusted EBITDA increased by more than 100% to $4 million in Q2 2025.
Positive Cash Flow
The company generated positive cash flow from operations for the first six months of the year.
Negative Updates
Facilities Management Revenue Decline
Revenues from the facilities management segment declined by 35%, representing a smaller portion of the overall business.
Decreased Consolidated Gross Margin
The consolidated gross margin decreased from 37.3% in Q2 2024 to 17.8% in Q2 2025, impacted by revenue mix changes.
Increased Interest Expense
Interest expenses increased to $859,000 in Q2 2025 compared to $378,000 in the year-ago quarter due to increased procurement transactions and debt from the new facility.
Company Guidance
In the second quarter of 2025, TSS Inc. reported significant financial growth, achieving a record year-over-year revenue increase of 262% to $44 million, compared to $12.2 million in the same quarter of the previous year. The company experienced notable growth in its procurement services, with revenue surging 572% year-over-year to $33 million, and systems integration, which saw a 91% increase. Adjusted EBITDA more than doubled to $4 million, demonstrating robust operational performance. Despite a 35% decline in the facilities management segment, TSS Inc. remains optimistic, raising its full-year 2025 adjusted EBITDA growth outlook from at least 50% to at least 75% compared to 2024. The new 213,000 square foot Georgetown facility, now fully operational, is expected to support continued growth and efficiency as the company capitalizes on the increasing demand for AI-enabled infrastructure.TSS Financial Statement Overview
Summary
TSS showcases strong financial performance with impressive revenue growth and improving profitability margins. However, the high leverage and low equity ratio warrant caution. Robust cash flow generation supports operational stability and future growth initiatives.Income Statement
TSS has shown a strong revenue growth trajectory with a notable increase from $30.64 million in 2022 to $231.21 million in TTM, indicating robust demand for its services. The gross profit margin stands at 12.43% for TTM, reflecting good control over production costs. The net profit margin of 3.87% in TTM is a positive sign of effective cost management, although there is room for improvement. The EBIT margin of 5.35% and EBITDA margin of 5.66% in TTM show operational efficiency improvements over time.65
Positive
Balance Sheet
The debt-to-equity ratio of 2.63 in TTM suggests a relatively high leverage, which could pose financial risk if not managed carefully. The equity ratio of 8.27% indicates a lower equity base relative to total assets, highlighting potential stability concerns. However, the significant increase in stockholders' equity from $2.93 million in 2022 to $9.39 million in TTM is a positive indicator of financial strengthening.55
Neutral
Cash Flow
TSS has demonstrated strong cash flow generation with a significant increase in operating cash flow to $33.29 million in TTM. The operating cash flow to net income ratio is 3.72, indicating efficient conversion of income into cash. The free cash flow to net income ratio is 1.11, reflecting sound capital expenditure management. The free cash flow growth rate is commendable, supporting operational expansion.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 263.02M | 148.14M | 54.40M | 30.64M | 27.41M | 45.06M |
| Gross Profit | 32.13M | 22.35M | 11.00M | 8.98M | 6.36M | 6.80M |
| EBITDA | 14.53M | 9.48M | 2.07M | 1.30M | -266.00K | 1.02M |
| Net Income | 9.02M | 5.98M | 74.00K | -73.00K | -1.30M | 79.00K |
Balance Sheet | ||||||
| Total Assets | 139.47M | 96.57M | 25.60M | 31.41M | 19.28M | 23.81M |
| Cash, Cash Equivalents and Short-Term Investments | 36.84M | 23.22M | 11.83M | 20.40M | 7.99M | 19.01M |
| Total Debt | 44.08M | 32.71M | 4.32M | 4.78M | 7.61M | 3.19M |
| Total Liabilities | 129.93M | 89.43M | 22.05M | 28.47M | 17.08M | 20.63M |
| Stockholders Equity | 9.54M | 7.14M | 3.55M | 2.93M | 2.20M | 3.18M |
Cash Flow | ||||||
| Free Cash Flow | 21.41M | 6.81M | -8.53M | 14.18M | -10.52M | 9.60M |
| Operating Cash Flow | 53.95M | 15.30M | -8.27M | 14.71M | -10.45M | 10.00M |
| Investing Cash Flow | -32.54M | -8.48M | -257.00K | -536.00K | -64.00K | -396.00K |
| Financing Cash Flow | 12.12M | 4.58M | -40.00K | -1.77M | -504.00K | 733.00K |
TSS Technical Analysis
Positive
17.96
Price Trends
17.93
Positive
19.60
Negative
15.00
Positive
Market Momentum
0.53
Negative
60.56
Neutral
53.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSSI, the sentiment is Positive. The current price of 17.96 is above the 20-day moving average (MA) of 17.17, above the 50-day MA of 17.93, and above the 200-day MA of 15.00, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 60.56 is Neutral, neither overbought nor oversold. The STOCH value of 53.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $500.78M | 15.78 | 24.57% | ― | 9.77% | 34.36% | |
66 Neutral | $509.42M | 50.49 | 122.80% | ― | 328.80% | 339.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $528.48M | 31.86 | 15.27% | 2.45% | 4.18% | -51.62% | |
58 Neutral | $517.65M | ― | -41.49% | ― | -13.76% | -75.18% | |
53 Neutral | $431.27M | 88.64 | 2.21% | ― | -14.36% | -73.74% | |
50 Neutral | $463.05M | ― | -72.72% | 11.55% | -4.99% | -1016.81% |
* Technology Sector Average
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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.