TSS (TSSI) AI Stock Analysis

• Market Cap: $383.77M
• Dividend Yield: N/A
• Average Volume (3M): 3.22M
• Price to Earnings (P/E): 40.5
• Beta (1Y): 3.57
• Revenue Growth: 328.80%
• EPS Growth: 339.87%
• Country: US
• Employees: 161
• Sector: Technology
• Sector Strength: 85
• Industry: Information Technology Services
• EPS (TTM): 0.06
• Shares Outstanding: 28,364,244
• 10 Day Avg. Volume: 2,696,971
• 30 Day Avg. Volume: 3,219,828
• 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: 1.96
• Enterprise Value/Revenue: 3.25
• Enterprise Value/Gross Profit: 26.15
• Enterprise Value/Ebitda: 57.39
• 1Y Price Target: $16.50
• Price Target Upside: 14.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 69 Neutral
• Price Target: $17.50 ▲(21.53% Upside)

TSS's overall stock score is driven by strong financial performance and positive earnings call highlights, indicating robust growth potential. However, technical analysis suggests caution due to bearish trends, and the high P/E ratio reflects premium valuation expectations. The absence of a dividend yield and challenges in certain segments temper the outlook.

Positive Factors

Revenue Growth

The significant year-over-year revenue increase indicates strong demand for TSS's services, suggesting a robust market position and potential for continued expansion.

Operational Efficiency

The doubling of adjusted EBITDA reflects improved operational efficiency, which enhances profitability and supports sustainable business growth.

Cash Flow Generation

Generating positive cash flow from operations indicates effective cash management, providing financial flexibility for future investments and growth initiatives.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially limiting the company's ability to invest in growth opportunities and affecting long-term financial stability.

Decreased Gross Margin

A significant decrease in gross margin may indicate cost pressures or pricing challenges, which could impact profitability if not addressed.

Facilities Management Revenue Decline

The decline in facilities management revenue suggests potential weaknesses in this segment, which could affect overall revenue diversification and stability.

TSS Business Overview & Revenue Model

Company Description

TSS, 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 Money

TSS 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 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 despite robust cash flow generation supporting operational stability.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	231.21M	148.14M	54.40M	30.64M	27.41M	45.06M
Gross Profit	28.73M	22.35M	11.00M	8.98M	6.36M	6.80M
EBITDA	13.09M	9.48M	2.07M	1.30M	-266.00K	1.02M
Net Income	8.94M	5.98M	74.00K	-73.00K	-1.30M	79.00K
Balance Sheet
Total Assets	113.54M	96.57M	25.60M	31.41M	19.28M	23.81M
Cash, Cash Equivalents and Short-Term Investments	27.34M	23.22M	11.83M	20.40M	7.99M	19.01M
Total Debt	32.92M	32.71M	4.32M	4.78M	7.61M	3.19M
Total Liabilities	104.15M	89.43M	22.05M	28.47M	17.08M	20.63M
Stockholders Equity	9.39M	7.14M	3.55M	2.93M	2.20M	3.18M
Cash Flow
Free Cash Flow	9.97M	6.81M	-8.53M	14.18M	-10.52M	9.60M
Operating Cash Flow	33.29M	15.30M	-8.27M	14.71M	-10.45M	10.00M
Investing Cash Flow	-23.32M	-8.48M	-257.00K	-536.00K	-64.00K	-396.00K
Financing Cash Flow	2.99M	4.58M	-40.00K	-1.77M	-504.00K	733.00K

TSS Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 14.4 is below the 20-day moving average (MA) of 14.96, below the 50-day MA of 20.88, and above the 200-day MA of 14.24, indicating a neutral trend. The MACD of -1.92 indicates Negative momentum. The RSI at 46.79 is Neutral, neither overbought nor oversold. The STOCH value of 61.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSSI.

TSS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSSI	69 Neutral	$383.77M	40.48	122.80%	―	328.80%	339.87%
III	69 Neutral	$252.54M	33.57	8.29%	3.45%	-9.86%	―
Sector *	61 Neutral	$36.58B	11.16	-10.39%	1.86%	8.71%	-7.09%
TLS	58 Neutral	$460.21M	―	-41.49%	―	-13.76%	-75.18%
CSPI	52 Neutral	$108.08M	40,175.00	-3.33%	1.10%	-0.37%	-161.02%
UIS	51 Neutral	$286.60M	―	192.24%	―	-1.53%	78.84%
TTEC	44 Neutral	$183.19M	―	-9.11%	1.75%	-8.21%	91.83%