TSS (TSSI)
NASDAQ:TSSI
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TSS
(NASDAQ:TSSI)
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Rating:52Neutral
Price Target:
$12.50
▼(-25.99% Downside)
Action:Reiterated
Date:05/12/26
The score is held back primarily by weak cash-flow performance (negative operating and free cash flow) and a deteriorating recent revenue trend, alongside technically weak price action below key moving averages. Offsetting these risks, the latest earnings call was constructive with improving mix and margins and reaffirmed adjusted EBITDA guidance, though valuation remains demanding at a ~33x P/E without a dividend yield.
Positive Factors
High-margin systems integration growth
A sustained shift toward systems integration, which grew 88% YoY and now comprises a quarter of revenue, meaningfully raises the business's structural margin profile. Over 2–6 months this supports higher recurring project revenue, improved gross margins and better earnings quality as procurement volatility declines.
Negative Factors
Negative operating and free cash flow
Persistent negative operating and free cash flow undermines sustainable self-funding; reported profits have not translated into cash. Over 2–6 months this elevates refinancing, working-capital strain and execution risk, particularly as the company plans material CapEx and scales higher-capacity initiatives.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin systems integration growth
A sustained shift toward systems integration, which grew 88% YoY and now comprises a quarter of revenue, meaningfully raises the business's structural margin profile. Over 2–6 months this supports higher recurring project revenue, improved gross margins and better earnings quality as procurement volatility declines.
Read all positive factors
TSS (TSSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$312.46M
Dividend YieldN/A
Average Volume (3M)1.71M
Price to Earnings (P/E)33.4
Beta (1Y)3.79
Revenue Growth-12.59%
EPS Growth33.81%
CountryUS
Employees161
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.62
Shares Outstanding28,073,956
10 Day Avg. Volume1,995,024
30 Day Avg. Volume1,714,709
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)2.16
Price to Sales (P/S)0.67
P/FCF Ratio78.03
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue1.48
Enterprise Value/Gross Profit9.73
Enterprise Value/Ebitda20.95
Forecast
1Y Price Target
$16.00Price Target Upside-5.27% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.26
Revenue Forecast (FY)$201.02M
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, Facilit...
How the Company Makes Money
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TSS Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Positive
The call presents a constructive strategic transition: strong, high-margin systems integration growth (88% YoY) and meaningful margin expansion underpin improving profitability metrics and a confident adjusted EBITDA outlook ($20M–$22M). However, near-term headline revenue declined materially (to $55.3M) due to normalization in lumpy procurement activity, and reported net income and EPS were lower YoY driven by tax and interest items. Operational scaling, leadership hires and the $17M planned CapEx for next-generation AI racks are positive signs of positioning for durable, higher-margin growth, though customer concentration and variable procurement demand remain risks.Positive Updates
Strong Systems Integration Growth
Systems integration revenue increased 88% year-over-year to $14.1M (from $7.5M), and grew to represent 25% of total revenue versus 8% in the prior year period, driving higher-margin business mix.
Negative Updates
Total Revenue Decline
Consolidated total revenue declined to $55.3M from $99.0M in prior-year quarter, primarily due to a normalization in procurement services activity following an unusually large Q1 2025.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Systems Integration Growth
Systems integration revenue increased 88% year-over-year to $14.1M (from $7.5M), and grew to represent 25% of total revenue versus 8% in the prior year period, driving higher-margin business mix.
Read all positive updates
Company Guidance
Management guided to full-year adjusted EBITDA of $20–$22 million and said results are expected to be at the high end of that range; Q1 adjusted EBITDA was $5.3 million on revenue of $55.3 million. They forecast an effective tax rate of roughly 26% in Q2–Q4 (about 22.7% for the full year), plan to deploy approximately $17 million of incremental CapEx to be in use by Q3, and noted that the Round Rock warehousing activity is included in the year’s adjusted EBITDA outlook and that a multiyear agreement provides revenue visibility and downside protection. Management highlighted that systems integration — the primary growth driver — was $14.1 million in Q1 (25% of revenue, +88% year‑over‑year) with a 37.5% gross margin (vs. 22.1% a year ago), while procurement was $40.0 million (‑56% YoY) with lower margins, and reiterated that higher SI volumes and wider margins should drive future profitability and higher revenues from their primary AI customer over the next several years.TSS Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
63
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 202.11M | 245.72M | 148.14M | 54.40M | 30.64M | 27.41M |
| Gross Profit | 30.79M | 31.29M | 22.35M | 11.00M | 8.98M | 6.36M |
| EBITDA | 14.30M | 14.40M | 9.48M | 2.07M | 1.30M | -266.00K |
| Net Income | 14.42M | 15.13M | 5.98M | 74.00K | -73.00K | -1.30M |
Balance Sheet | ||||||
| Total Assets | 153.58M | 184.94M | 96.57M | 25.60M | 31.41M | 19.28M |
| Cash, Cash Equivalents and Short-Term Investments | 65.97M | 85.51M | 23.22M | 11.83M | 20.40M | 8.00M |
| Total Debt | 40.19M | 41.64M | 32.71M | 4.32M | 4.78M | 7.61M |
| Total Liabilities | 74.90M | 108.30M | 89.43M | 22.05M | 28.47M | 17.08M |
| Stockholders Equity | 78.68M | 76.64M | 7.14M | 3.55M | 2.93M | 2.20M |
Cash Flow | ||||||
| Free Cash Flow | -19.11M | 2.12M | 6.81M | -8.53M | 14.18M | -10.52M |
| Operating Cash Flow | -702.00K | 34.86M | 15.30M | -8.27M | 14.71M | -10.45M |
| Investing Cash Flow | -18.40M | -32.74M | -8.48M | -257.00K | -536.00K | -64.00K |
| Financing Cash Flow | 59.55M | 60.17M | 4.58M | -40.00K | -1.77M | -504.00K |
TSS Technical Analysis
Negative
16.89
Price Trends
13.29
Negative
11.30
Positive
12.89
Negative
Market Momentum
-0.77
Positive
42.28
Neutral
34.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSSI, the sentiment is Negative. The current price of 16.89 is above the 20-day moving average (MA) of 13.41, above the 50-day MA of 13.29, and above the 200-day MA of 12.89, indicating a bearish trend. The MACD of -0.77 indicates Positive momentum. The RSI at 42.28 is Neutral, neither overbought nor oversold. The STOCH value of 34.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSSI.
TSS Risk Analysis
TSS disclosed 1 risk factors in its most recent earnings report. TSS reported the most risks in the "Legal & Regulatory" 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $417.87M | 6.77 | 31.81% | ― | 17.04% | 45.20% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $252.90M | 18.19 | 15.84% | 2.41% | -5.71% | -38.81% | |
56 Neutral | $350.15M | 38.22 | -24.08% | ― | 66.50% | 52.19% | |
52 Neutral | $312.46M | 33.44 | 25.27% | ― | -12.59% | 33.81% | |
52 Neutral | $332.18M | ― | -135.32% | 17.14% | 20.00% | 21.06% | |
47 Neutral | $235.75M | ― | -19.59% | ― | -5.40% | -172.56% |
* 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.