Data Storage (NASDAQ:DTST) Announces Quarterly Earnings Results

Data Storage (NASDAQ:DTST) issued its quarterly earnings data on Friday. The company reported ($0.25) EPS for the quarter, topping analysts’ consensus estimates of ($0.34) by $0.09, Zacks reports. The business had revenue of $0.35 million during the quarter, compared to analysts’ expectations of $0.40 million. Data Storage had a net margin of 81.52% and a negative return on equity of 2.84%.

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 Stock Performance

DTST stock traded down $0.30 during mid-day trading on Friday, reaching $4.06. 38,467 shares of the stock traded hands, compared to its average volume of 37,033. Data Storage has a one year low of $3.25 and a one year high of $5.44. The stock has a market capitalization of $8.80 million, a PE ratio of -101.50 and a beta of 1.15. The business has a 50-day moving average price of $4.01 and a two-hundred day moving average price of $4.34.

Wall Street Analyst Weigh In

Separately, Weiss Ratings upgraded 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’s stock. According to data from MarketBeat, Data Storage has a consensus rating of “Reduce”.

Hedge Funds Weigh In On Data Storage

Several hedge funds have recently added to or reduced their stakes in DTST. Zacks Investment Management bought a new position in Data Storage in the 4th quarter worth about $83,000. XTX Topco Ltd bought a new position in Data Storage in the fourth quarter worth approximately $134,000. Dimensional Fund Advisors LP lifted its holdings in Data Storage by 15.1% during the third quarter. Dimensional Fund Advisors LP now owns 37,574 shares of the company’s stock worth $162,000 after buying an additional 4,920 shares during the period. Elevation Point Wealth Partners LLC purchased a new stake in Data Storage during the third quarter worth $186,000. Finally, Rothschild Wealth LLC purchased a new position in shares of Data Storage in the 4th quarter valued at $205,000. 11.56% of the stock is currently owned by institutional investors.

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.