TSS, Inc. (TSSI) — Current price: $17.47 | Suggested buy range: $12–14 (only on a pullback with risk controls).

Stock market information for TSS Inc (TSSI)

• TSS Inc is a equity in the USA market.
• The price is 17.47 USD currently with a change of -0.88 USD (-0.05%) from the previous close.
• The latest open price was 18.54 USD and the intraday volume is 2267088.
• The intraday high is 18.74 USD and the intraday low is 17.19 USD.
• The latest trade time is Thursday, September 25, 05:45:00 +0530.

Why that range: at today’s run-rate the market is paying a rich multiple for a procurement-heavy revenue mix and a single large AI-rack program; I’d want ~30–40% margin of safety vs my base-case intrinsic value (details below).

📝 GPT Investor Master Checklist (TSSI)

1) Company Overview

• What it does: Data-center integration services: procurement, systems integration (incl. AI rack buildouts), facilities management. Customers are OEMs and large enterprises. (Total Site Solutions)
• Sector/Sub-sector: IT services / data-center integration. (Bloomberg)
• TAM: Riding secular data-center & AI buildout; company materials pitch integration for “advanced computing & AI.” (Directional, not quantified in filings.) (TSS, Inc.)
• Main competitors: Other integrators / contract manufacturers serving data centers and OEMs (varies by program; not tightly disclosed).
• Customer/offer concentration: Material reliance on a multi-year AI rack integration agreement; procurement is a large share of revenue. (SEC)

2) Quick Screen

• Debt/Equity: New Susser Bank facility up to $20m (accordion to $25m) signed Dec 31, 2024; $8.7m drawn initially (interest-only during construction). (SEC)
• Cash & cash equivalents: $18.2m at Dec 31, 2024 (includes $5m pledged to secure the loan). (SEC)
• Registered address / HQ: Operates in Round Rock, TX with plans to move most ops/HQ to Georgetown, TX (213k sq ft new facility). (Dun & Bradstreet)
• Scandal/Fraud (company/promoters): No known fraud disclosures in recent filings; note a material weakness in 2024 ICFR (controls) identified and under remediation. (SEC)
• Debtor days / Working capital: Receivables rose with scale ($16.2m vs $3.5m prior year); full days calc requires quarter detail. (SEC)
• Market cap: Using current price and ~21.8m shares from filings, rough m-cap ≈ mid-$300Ms. (Shares can change; check latest IR quote.) (SEC)
• Free cash flow: 2024 cash from ops $15.3m; capex heavy for new site ($8.5m in 2024). Directionally positive but investment phase ongoing. (SEC)
• FX exposure: Primarily U.S.-based operations; no material FX risk called out in 10-K risk highlights.

3) Shareholder Alignment

• Promoters / Mgmt: Public U.S. small cap; leadership agreements disclosed (CEO/exec contracts). (SEC)
• Ownership / pledging: No promoter pledge structure typical of India; U.S. small-cap register. (See proxy for latest cap table.) (TSS, Inc.)
• Openness: IR keeps presentations/press releases current; detailed program and facility disclosures. (TSS, Inc.)
• Dividend: None indicated. (SEC)

4) Performance

• Share Price (spot): $17.47.
• Sales growth: Q2-25 revenue $44.0m (+262% YoY); 1H-25 $142.9m (+410% YoY). Mix: procurement $123.2m, systems integration $17.0m, facilities mgmt $2.8m. (TSS, Inc.)
• Profitability: Q2-25 gross profit $7.8m, net income $1.5m, EPS $0.06; 1H-25 net $4.5m. (TSS, Inc.)
• Five-year trend (annual): 2024 revenue $148m (vs $54m in 2023; $31m in 2022). (MacroTrends)

5) Efficiency

• OPM / margin: Procurement surges compress blended margins; 2024 op income improved vs 2022–23 as scale kicked in. (10-K shows 2023 op income $1.75m). (SEC)
• ROCE / ROE: Not explicitly broken out; small-cap with rising asset base (new facility) → reported returns likely volatile near-term.
• Receivables / Inventory days: Receivables up alongside procurement scale; watch WC intensity. (SEC)

6) Financial Risk

• Debt: Construction/term-loan structure, SOFR + 300 bps (floor 4.5%), secured by substantially all assets; interest-only during buildout. (SEC)
• Contingent liabilities / Legal: Standard small-cap risks; no prominent litigations flagged in 10-K. (SEC)
• ICFR: 2024 material weakness disclosed (design of certain management review controls). Track remediation. (SEC)

7) Volume & Liquidity

• Today’s volume: ~2.27m shares intraday (液). Thin-to-mid liquidity for a small cap; expect volatility.
• Holder base / institutions: Not concentrated in large DIIs/FIIs (U.S. small-cap profile). See latest proxy/13F for detail. (TSS, Inc.)

8) Valuation (quick take)

• Run-rate check (1H-25): Revenue $142.9m, GP $17.0m, NI $4.5m → simple annualization is hazardous but gives context. (TSS, Inc.)
• Quality adjustment: Procurement is low-margin and inflates revenue; value the business on gross profit / operating earnings, not sales.
• Owner-earnings lens: Normalized OE (post working-capital/maintenance capex) feels $7–10m base-case near term if volumes persist and the new facility ramps without hiccups (analyst-style estimate; not a company figure).
• Fair EV band: At 10–12× owner earnings for a single-program, small-cap integrator with execution/customer concentration risk ⇒ $70–120m EV. Net of ~$18m cash and ~$9m drawn debt (Dec-24), equity fair value clusters around $80–140m → $3.5–6.5/sh on ~21–22m diluted shares. (Very wide range; emphasizes how much execution & mix matter.) (SEC)
• Market reality check: Price momentum strong (RS 85 per IBD), but articles flag it as extended above prior buy points. (Investors)

9) Growth Components

• Capacity expansion: New ~213k sq ft facility to support AI rack integration; planned $25–30m buildout. (SEC)
• Moat: Execution/logistics speed & OEM relationships vs. commodity procurement economics.
• Customers: Program-driven; recurring only if OEM refresh cycles repeat. (SEC)
• R&D: Service business; investments skew to facilities & process rather than classic R&D.
• ESG/Succession: Standard small-cap disclosures; no specific long-dated targets highlighted in filings. (SEC)

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Buffett–Munger style take (straight talk)

• It’s a good business at the right price, not a wonderful business at any price. Procurement-heavy booms can mislead on revenue quality. I value this on durable gross profit and owner earnings, discounting for single-program risk, ICFR weakness, and new-facility execution.
• What would make me upgrade?
  1. Evidence of second/third large programs to diversify dependence. (TSS, Inc.)
  2. Gross margin stability >17–18% despite procurement mix. (TSS, Inc.)
  3. Clean internal controls letter next year. (SEC)

New mental frameworks to apply

1. “Revenue Quality Haircut” — For integrators, apply a 50–70% haircut to procurement revenue when thinking about intrinsic value; anchor on gross profit not sales. (Prevents “big-number syndrome.”)
2. “Program Concentration Penalty” — If >40% of GP is tied to a single customer/program, assign a multiple discount of 20–40% to your base EV/EBITDA.
3. “Capacity-Debt Matching” — Growth capex funded by term debt is acceptable only if customer cash flows offset debt service (as TSS anticipates); otherwise, insist on a higher margin of safety. (SEC)

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My stance & execution plan

• Status: Momentum says “trend,” fundamentals say “prove durability.”
• Buy discipline: $12–14 (roughly where EV/Owner-Earnings would drop toward low-teens on my base case). Starter size only; add on evidence of a second program and clean ICFR.
• Risk controls:
  • Position ≤2% of portfolio; it’s a small-cap with program risk.
  • Re-underwrite after each quarter for mix, GP%, WC drain, and facility ramp milestones. (TSS, Inc.)