Data Storage (NASDAQ:DTST) Releases Quarterly Earnings Results, Misses Expectations By $0.24 EPS

Data Storage (NASDAQ:DTST) announced its earnings results on Friday. The company reported ($0.53) EPS for the quarter, missing the consensus estimate of ($0.29) by ($0.24), Zacks reports. The company had revenue of $0.36 million for the quarter, compared to analyst estimates of $0.40 million.

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

• Nexxis revenue from continuing operations rose 9.3% year over year to $359,000, while gross profit increased 21.9% to $168,000 and gross margin improved to 47% from 42.1%, supported by new customers, higher existing-customer spending, favorable mix, and operating leverage.
• Data Storage ended the quarter with approximately $9.3 million in cash and marketable securities and no long-term debt, providing flexibility to pursue acquisitions, strategic investments, and internally developed initiatives.
• The company’s net loss attributable to common shareholders widened to $1.2 million from $732,000, as SG&A rose 33.2% to $1.5 million, driven primarily by higher non-cash stock compensation and professional fees.
• Management is evaluating more than 100 potential opportunities across cybersecurity, AI infrastructure, telecommunications, software, and related markets, but remains cautious about unrealistic valuations and is not yet ready to announce a transaction.
• Management said it would like to sign a nonbinding letter of intent within 45–60 days and close an acquisition by late fourth quarter 2026 or the first quarter of 2027, likely using a combination of cash, stock, and earn-out structures to limit risk and align seller incentives.

Data Storage Stock Performance

Shares of DTST traded down $0.52 during mid-day trading on Friday, reaching $3.06. The company had a trading volume of 87,873 shares, compared to its average volume of 13,159. The company has a market capitalization of $7.15 million, a price-to-earnings ratio of -9.27 and a beta of 1.15. The company’s 50 day simple moving average is $3.32 and its 200 day simple moving average is $3.81. Data Storage has a 1-year low of $2.85 and a 1-year high of $5.15.

Wall Street Analyst Weigh In

Separately, Weiss Ratings restated a “hold (c)” rating on shares of Data Storage in a research report on Thursday, July 2nd. Two investment analysts have rated the stock with a Hold rating, Based on data from MarketBeat, the stock has an average rating of “Hold”.

Insider Activity

In related news, CEO Charles M. Piluso sold 41,793 shares of the business’s stock in a transaction on Friday, May 22nd. The stock was sold at an average price of $3.82, for a total transaction of $159,649.26. Following the sale, the chief executive officer owned 255,684 shares in the company, valued at $976,712.88. The trade was a 14.05% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 86,958 shares of company stock worth $333,310 in the last three months. 21.20% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Renaissance Technologies LLC boosted its position in Data Storage by 54.8% during the 4th quarter. Renaissance Technologies LLC now owns 136,100 shares of the company’s stock worth $697,000 after buying an additional 48,200 shares during the period. Elevation Point Wealth Partners LLC bought a new position in shares of Data Storage during the third quarter valued at $186,000. Rothschild Wealth LLC bought a new position in shares of Data Storage during the fourth quarter valued at $205,000. XTX Topco Ltd acquired a new position in shares of Data Storage during the fourth quarter worth $134,000. Finally, Zacks Investment Management acquired a new position in shares of Data Storage during the fourth quarter worth $83,000. Institutional investors 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.