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Investing.com - TSS Inc (NASDAQ:TSSI) received its first analyst coverage Monday as Lucid Capital Markets initiated with a Buy rating and a $15.00 price target, representing a 56% upside from the current price of $9.63.
Lucid Capital Markets highlighted TSS’s position in the AI infrastructure space, noting the company has a history of procuring hardware, building server racks, and maintaining computer networks for customers across banking, healthcare, and other industries. This focus has contributed to TSS’s impressive 91.7% revenue growth in the last twelve months, according to InvestingPro data.
The firm pointed to TSS’s partnership with Dell as a key competitive advantage, as Dell has emerged as a leading supplier of AI-enabled servers amid surging demand for full racks of these specialized systems.
While Lucid Capital Markets projects TSS’s total company revenues will decline approximately 24% in 2026 due to lapping extraordinary low-margin procurement volumes in the first quarter of 2025, it expects significant growth in the core, high-margin system integration and facilities management segments. This outlook comes despite TSS’s current weak gross profit margin of 12.7%, one of several financial insights available through InvestingPro.
The research firm noted TSS currently trades at less than 1x enterprise value to sales with minimal institutional ownership, suggesting investors are overlooking the company’s potential in the growing AI data center market. However, InvestingPro analysis indicates TSS is currently overvalued based on its Fair Value model, with the stock trading at a P/E ratio of 44x and an EV/EBITDA multiple of 23x. Despite these high multiples, TSS has seen a significant 19.6% return over the last week, though it remains down 33.3% over the past six months. For comprehensive analysis of TSS and 1,400+ other US stocks, investors can access detailed Pro Research Reports through InvestingPro.
In other recent news, TSS Inc reported a notable decrease in revenue for the third quarter of 2025, with figures dropping to $41.9 million compared to $70.1 million in the same period the previous year. The company also experienced a net loss of $1.5 million, contrasting with a net income of $2.6 million from the same quarter last year. These financial results represent a significant shift in the company’s fiscal performance. Despite these developments, no updates on mergers or acquisitions were reported. Analyst firms have not provided any recent upgrades or downgrades for TSS Inc. Investors are closely monitoring these recent developments to assess the company’s future outlook.
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