TSS, Inc. (NASDAQ: TSSI)

Sector: Technology Industry: Information Technology Services CIK: 0001320760
Market Cap 154.77 Mn
P/B 2.44
P/E 31.73
P/S 0.66
ROIC (Qtr) 10.43
Div Yield % 0.00
Rev 1y % (Qtr) -40.23
Total Debt (Qtr) 41.35 Mn
Debt/Equity (Qtr) 0.65

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 75.70M provide 13.24x coverage of short-term debt 5.72M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 164.63M provides 3.98x coverage of total debt 41.35M, indicating robust asset backing and low credit risk.
  • Tangible assets of 164.63M provide exceptional 13.65x coverage of deferred revenue 12.06M, showing strong service capability backing.
  • Robust tangible asset base of 164.63M provides 4.80x coverage of working capital 34.32M, indicating strong operational backing.
  • Tangible assets of 164.63M provide robust 14.07x coverage of other current liabilities 11.70M, indicating strong asset backing.

Bear case

  • Operating cash flow of (3.10M) barely covers its investment activities of (38.92M), with a coverage ratio of 0.08, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (3.10M) provides insufficient coverage of deferred revenue obligations of 12.06M, which is -0.26x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (3.10M) shows concerning coverage of stock compensation expenses of 3.51M, with a -0.88 ratio indicating potential earnings quality issues.
  • Free cash flow of (42.03M) provides weak coverage of capital expenditures of 38.92M, with a -1.08 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (3.10M) provides minimal -11.50x coverage of tax expenses of 270000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Information Technology Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IBM International Business Machines Corp 279.99 Bn 35.41 4.28 66.57 Bn
2 ACN Accenture plc 168.17 Bn 22.09 2.38 8.20 Bn
3 INFY Infosys Ltd 74.96 Bn 23.74 3.89 -
4 CTSH Cognizant Technology Solutions Corp 41.45 Bn 19.48 1.99 1.17 Bn
5 FIS Fidelity National Information Services, Inc. 35.21 Bn 231.62 3.36 13.00 Bn
6 WIT Wipro Ltd 29.93 Bn 19.70 2.97 1.95 Bn
7 BR Broadridge Financial Solutions, Inc. 26.38 Bn 28.51 3.74 3.28 Bn
8 LDOS Leidos Holdings, Inc. 23.72 Bn 16.88 1.37 5.23 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.95 1.44
EV to Cash from Ops. EV/CFO -50.57 5.63
EV to Debt EV to Debt 3.80 8.06
EV to EBIT EV/EBIT 16.46 -4.05
EV to EBITDA EV/EBITDA 14.81 -0.52
EV to Free Cash Flow [EV/FCF] EV/FCF -3.74 -1.66
EV to Market Cap EV to Market Cap 1.01 1.35
EV to Revenue EV/Rev 0.67 57.14
Price to Book Value [P/B] P/B 2.44 3.34
Price to Earnings [P/E] P/E 31.73 -5.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.83
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.66
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.24
Interest Coverage Int. cover (Qtr) 2.17 -319.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -2,083.01 -253.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 62.97 114.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 27.30 -22.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 52.74 -25.03
EBIT Growth (1y) % EBIT 1y % (Qtr) 32.22 -82.44
EBT Growth (1y) % EBT 1y % (Qtr) 15.17 97.07
EPS Growth (1y) % EPS 1y % (Qtr) 15.79 147.29
FCF Growth (1y) % FCF 1y % (Qtr) -329.49 -8,638.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 56.92 -8.24
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.42 0.78
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 1.15 0.66
Current Ratio Curr Ratio (Qtr) 1.52 2.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.65 0.88
Interest Cover Ratio Int Coverage (Qtr) 2.17 -319.17
Times Interest Earned Times Interest Earned (Qtr) 2.17 -319.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.20 -550.76
EBIT Margin % EBIT Margin % (Qtr) 4.06 -775.74
EBT Margin % EBT Margin % (Qtr) 2.19 -827.89
Gross Margin % Gross Margin % (Qtr) 12.30 24.07
Net Profit Margin % Net Margin % (Qtr) 2.10 -830.34