TSS (TSSI)
NASDAQ:TSSI
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TSS
(NASDAQ:TSSI)
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Rating:66Neutral
Price Target:
$14.00
▼(-17.11% Downside)
Action:ReiteratedDate:04/01/26
The score is driven primarily by improving financial performance and scale, but held back by margin compression and uneven cash conversion (thin 2025 free cash flow). Technicals are moderately supportive with positive momentum but a still-weak 200-day setup, while valuation is favorable on a low P/E. Earnings call tone and guidance are positive overall, though tempered by supply-chain uncertainty and one-time FY2025 benefits.
Positive Factors
Sustained Revenue Scale-Up
The company scaled revenue from roughly $54M to $246M over 2023–2025, showing durable demand and the ability to win large procurement and SI work. This scale supports operating leverage, stronger supplier access, and deeper customer relationships that underpin multi‑period growth and strategic positioning.
Negative Factors
Meaningful Gross Margin Compression
Sharply lower gross margins driven by mix shift to lower‑margin procurement and allocation of facility depreciation indicate structural pressure on core unit economics. Persistent margin erosion would limit profit scalability and leave future revenue gains less accretive to long‑term profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue Scale-Up
The company scaled revenue from roughly $54M to $246M over 2023–2025, showing durable demand and the ability to win large procurement and SI work. This scale supports operating leverage, stronger supplier access, and deeper customer relationships that underpin multi‑period growth and strategic positioning.
Read all positive factors
TSS (TSSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$387.44M
Dividend YieldN/A
Average Volume (3M)1.80M
Price to Earnings (P/E)10.9
Beta (1Y)3.98
Revenue Growth91.66%
EPS Growth7.52%
CountryUS
Employees161
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.41
Shares Outstanding27,773,594
10 Day Avg. Volume1,693,655
30 Day Avg. Volume1,797,316
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 Cap0.93
Enterprise Value/Revenue1.46
Enterprise Value/Gross Profit11.46
Enterprise Value/Ebitda30.56
Forecast
1Y Price Target
$16.00Price Target Upside-5.27% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.23
Revenue Forecast (FY)$192.60M
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
null...
TSS Earnings Call Summary
Earnings Call Date:Mar 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Positive
The call presents a largely positive operational and financial momentum story: strong top-line growth (+66% revenue), materially higher adjusted EBITDA (+83%), improved cash and working capital, and a reaffirmed/extended strategic customer relationship that provides revenue visibility. However, several headwinds temper the outlook: full‑year margin compression (13.2% vs 15.1% prior year), a meaningful portion of FY2025 results were influenced by one-time items (DTA reversal, accelerated revenue recognition), increased SG&A and capital spending, and ongoing supply-chain/memory risks that complicate forecasting. On balance, the strength of revenue, cash flow, customer contract extension, and guidance growth prospects outweigh the transitory and structural challenges called out on the call.Positive Updates
Strong Revenue Growth
Consolidated total revenue increased 66% year-over-year to $245.7 million in FY2025 (from just over $148 million in FY2024).
Negative Updates
Full-Year Gross Margin Compression
Consolidated gross margin decreased to 13.2% in FY2025 from 15.1% in FY2024, driven by allocation of Georgetown facility operations-related depreciation to cost of revenues and a larger share of lower-margin procurement revenue in the mix.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Revenue Growth
Consolidated total revenue increased 66% year-over-year to $245.7 million in FY2025 (from just over $148 million in FY2024).
Read all positive updates
Company Guidance
The company guided to adjusted EBITDA of $20.0–$22.0 million for 2026 (up from $18.6M in 2025, implying roughly +7% to +18% y/y), reiterated plans to double rack integration volume in calendar 2026 versus 2025, and said short-term volume forecasts are already exceeding internal plans with discussions underway about further capacity expansion; management also noted the reversal of a one‑time $7.6M 2025 income tax benefit and a $7.9M DTA on the balance sheet but expects a normalized 2026 effective tax rate of approximately 21%–22%, while stressing the guidance is conservative to reflect supply‑chain volatility and deal‑timing uncertainty.TSS Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
64
Positive
Cash Flow
48
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 245.72M | 148.14M | 54.40M | 30.64M | 27.41M |
| Gross Profit | 31.29M | 22.35M | 11.00M | 8.98M | 6.36M |
| EBITDA | 11.73M | 9.48M | 2.07M | 1.30M | -266.00K |
| Net Income | 15.13M | 5.98M | 74.00K | -73.00K | -1.30M |
Balance Sheet | |||||
| Total Assets | 184.94M | 96.57M | 25.60M | 31.41M | 19.28M |
| Cash, Cash Equivalents and Short-Term Investments | 85.51M | 23.22M | 11.83M | 20.40M | 8.00M |
| Total Debt | 41.64M | 32.71M | 4.32M | 4.78M | 7.61M |
| Total Liabilities | 108.30M | 89.43M | 22.05M | 28.47M | 17.08M |
| Stockholders Equity | 76.64M | 7.14M | 3.55M | 2.93M | 2.20M |
Cash Flow | |||||
| Free Cash Flow | 2.12M | 6.81M | -8.53M | 14.18M | -10.52M |
| Operating Cash Flow | 34.86M | 15.30M | -8.27M | 14.71M | -10.45M |
| Investing Cash Flow | -32.74M | -8.48M | -257.00K | -536.00K | -64.00K |
| Financing Cash Flow | 60.17M | 4.58M | -40.00K | -1.77M | -504.00K |
TSS Technical Analysis
Positive
16.89
Price Trends
10.28
Positive
9.83
Positive
14.99
Negative
Market Momentum
0.87
Negative
65.84
Neutral
64.89
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 16.89 is above the 20-day moving average (MA) of 11.74, above the 50-day MA of 10.28, and above the 200-day MA of 14.99, indicating a neutral trend. The MACD of 0.87 indicates Negative momentum. The RSI at 65.84 is Neutral, neither overbought nor oversold. The STOCH value of 64.89 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $369.32M | 10.52 | 31.85% | ― | 12.86% | 54.95% | |
66 Neutral | $387.44M | 10.94 | 38.06% | ― | 91.66% | 7.52% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $321.36M | -10.17 | -31.77% | ― | 17.44% | 41.97% | |
52 Neutral | $327.66M | 42.13 | 12.82% | 2.41% | 0.68% | -67.84% | |
47 Neutral | $162.06M | -0.29 | -107.19% | 17.14% | 3.67% | 29.09% | |
44 Neutral | $205.76M | -1.68 | -20.84% | ― | -12.45% | -142.77% |
* 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.