Data Storage (NASDAQ:DTST) Releases Earnings Results, Beats Expectations By $0.09 EPS

Data Storage (NASDAQ:DTST) announced its earnings results on Friday. The company reported ($0.25) EPS for the quarter, beating the consensus estimate of ($0.34) by $0.09, Zacks reports. The business had revenue of $0.35 million for the quarter, compared to the consensus estimate of $0.40 million. Data Storage had a negative return on equity of 2.84% and a net margin of 81.52%.

Here are the key takeaways from Data Storage’s conference call:

• Data Storage said it is pivoting from the 2025 sale of CloudFirst into a new strategy centered on Sovereign AI Solutions, which it believes could become a new infrastructure category for regulated enterprises needing AI continuity, recovery, validation, and compliance.
• The company emphasized a strong balance sheet, including no long-term debt, about $9.7 million in cash and marketable securities at quarter-end, and a sharply reduced share count after the tender offer that cut outstanding shares by roughly 72%.
• Management said the new AI initiative will likely be built in stages, with near-term spending focused on planning and architecture, while larger capital expenditures and software development would follow later if the project advances.
• The continuing Nexxis business showed solid operating momentum in Q1, with sales up 10.9% year over year, gross profit up 32.1%, and gross margin expanding to 53.7%.
• Despite higher gross profit, SG&A jumped 71.8% to $1.5 million, driven largely by non-cash stock compensation and higher professional fees, which contributed to a $631,000 net loss for the quarter.

Data Storage Price Performance

NASDAQ:DTST opened at $4.06 on Friday. The firm has a 50-day moving average of $4.01 and a two-hundred day moving average of $4.34. The stock has a market cap of $8.81 million, a P/E ratio of 1.90 and a beta of 1.15. Data Storage has a 1-year low of $3.25 and a 1-year high of $5.44.

Wall Street Analyst Weigh In

Separately, Weiss Ratings raised shares of Data Storage from a “sell (d)” rating to a “hold (c)” rating in a research report on Monday, April 6th. Two research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, Data Storage currently has a consensus rating of “Reduce”.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the business. XTX Topco Ltd bought a new position in Data Storage during the fourth quarter worth $134,000. Zacks Investment Management bought a new stake in Data Storage during the fourth quarter valued at $83,000. Rothschild Wealth LLC acquired a new stake in shares of Data Storage during the fourth quarter worth $205,000. Renaissance Technologies LLC raised its holdings in shares of Data Storage by 54.8% during the fourth quarter. Renaissance Technologies LLC now owns 136,100 shares of the company’s stock worth $697,000 after purchasing an additional 48,200 shares during the period. Finally, Elevation Point Wealth Partners LLC bought a new position in shares of Data Storage in the 3rd quarter worth about $186,000. Institutional investors and hedge funds own 11.56% of the company’s stock.

Data Storage Company Profile

Data Storage Corporation provides data management and cloud solutions in the United States and internationally. It offers a suite of multi-cloud IT solutions, including cyber security solutions, which comprise ezSecurity, a security solution for endpoint security, system assessments, and risk analysis, as well as IBM system protection, including Ransomware defense. The company also provides data protection and recovery solutions, such as ezVault for offsite data protection; ezRecovery for fast data recovery; ezAvailability for real-time data replication with minimal recovery objectives; and ezMirror for data mirroring at the storage level.