Data Storage Corp (DTST)
NASDAQInformation TechnologyInformation Technology ServicesSnapshot 2026-09-04
$2.96-0.34%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologyInformation Technology ServicesSnapshot 2026-09-04
Broken: Primary pillar broken — EPS loss narrows from -$1.17 in FY26 to less negative: FY27 EPS -1.55 vs target > -1.17.
Data Storage invests in AI with a $300k initial spend and launched an AI subsidiary. The company trades at a PE of 16.3, above peers at 11.5, showing some market confidence. Recent divestitures may help refocus the business. These moves could stabilize revenue near $1.6 million in 2026.
Shares were delisted from Nasdaq, a major operational setback. Revenue is expected to drop 57% next year. The company missed earnings repeatedly, with EPS forecast at -$1.17 in 2026. Free cash flow yield is negative at -0.45%.
The market prices in a 57% revenue decline and a 20% premium to our $2.87 fair value. Our view is that the price is unjustified given the operational risks and negative earnings.
Breaks if: AI buildout delayed beyond 2026 or fails to generate growth
Breaks if: EPS loss worsens beyond -$1.17 in FY26 or fails to improve in FY27
revenue falls below $1.6 million in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a turnaround story with a medium confidence level. The company is currently loss-making, which adds risk, but management is stable and focused on strategic acquisitions and growing recurring revenue.
The market seems to have priced in a low expectations gap, indicating that DTST is viewed as cheap compared to its peers. However, the recent valuation increase suggests some optimism may be reflected in the stock.
Management's focus on growing recurring revenue from Nexxis operations is on track, showing positive growth and margin expansion. However, the overall recent financial performance has been weak, which poses a risk in the near term.
The long-term thesis hinges on the ability of management to execute on strategic acquisitions and maintain growth in recurring revenue. Additionally, the performance of sector bellwethers like IBM and ACN will be crucial, as their success or failure could impact DTST's momentum.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The company confirmed a focus on strategic M&A. This aligns with growth objectives. However, it posted a revenue miss in Q2. This raises concerns about recurring revenue growth.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
In the next 1 to 3 years, DTST's performance will depend on management's execution and external market conditions. Not investment advice.