Data Storage (NASDAQ:DTST) Posts Quarterly Earnings Results, Beats Estimates By $0.09 EPS

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

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 Trading Down 6.9%

NASDAQ DTST traded down $0.30 on Friday, reaching $4.06. The company’s stock had a trading volume of 38,467 shares, compared to its average volume of 37,033. The firm has a market cap of $8.81 million, a PE ratio of 1.90 and a beta of 1.15. The business has a 50-day moving average price of $4.01 and a 200 day moving average price of $4.34. Data Storage has a 52 week low of $3.25 and a 52 week high of $5.44.

Wall Street Analysts Forecast Growth

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

Institutional Trading of Data Storage

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DTST. Zacks Investment Management acquired a new position in Data Storage in the fourth quarter valued at about $83,000. XTX Topco Ltd acquired a new position in Data Storage in the fourth quarter valued at about $134,000. Dimensional Fund Advisors LP boosted its position in Data Storage by 15.1% in the third quarter. Dimensional Fund Advisors LP now owns 37,574 shares of the company’s stock valued at $162,000 after buying an additional 4,920 shares in the last quarter. Elevation Point Wealth Partners LLC acquired a new position in Data Storage in the third quarter valued at about $186,000. Finally, Rothschild Wealth LLC acquired a new position in Data Storage in the fourth quarter valued at about $205,000. Institutional investors own 11.56% of the company’s stock.

About Data Storage

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.