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

Data Storage (NASDAQ:DTST) announced its quarterly earnings data on Friday. The company reported ($0.53) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.29) by ($0.24), Zacks reports. The firm had revenue of $0.36 million for the quarter, compared to analysts’ expectations 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 Price Performance

NASDAQ:DTST opened at $3.06 on Friday. The company’s fifty day moving average price is $3.32 and its 200-day moving average price is $3.81. Data Storage has a 1-year low of $2.85 and a 1-year high of $5.15. The firm has a market capitalization of $7.16 million, a P/E ratio of -9.27 and a beta of 1.15.

Insider Transactions at Data Storage

In related news, CEO Charles M. Piluso sold 41,793 shares of the business’s stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $3.82, for a total transaction of $159,649.26. Following the completion of the transaction, the chief executive officer directly owned 255,684 shares in the company, valued at $976,712.88. The trade was a 14.05% decrease in their ownership of the stock. The transaction was disclosed in a document filed 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. Insiders own 21.20% of the company’s stock.

Hedge Funds Weigh In On Data Storage

Institutional investors have recently modified their holdings of the stock. Zacks Investment Management purchased a new stake in shares of Data Storage in the fourth quarter worth about $83,000. XTX Topco Ltd purchased a new position in Data Storage during the fourth quarter valued at approximately $134,000. Dimensional Fund Advisors LP lifted its holdings 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 acquiring an additional 4,920 shares during the period. Rothschild Wealth LLC purchased a new stake in Data Storage in the 4th quarter worth approximately $205,000. Finally, Elevation Point Wealth Partners LLC acquired a new stake in shares of Data Storage during the 3rd quarter worth approximately $186,000. Hedge funds and other institutional investors own 11.56% of the company’s stock.

Analyst Ratings Changes

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

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.