A Year in Review: TSS, Inc. (TSSI)

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TSS, Inc. (TSSI) has been on subscribers to The Bowser Report's radar since February 2019, but the past twelve months have been particularly eventful for the stock. As a provider of comprehensive information technology services, TSS has faced both challenges and opportunities in a dynamic and rapidly evolving tech sector. Here, we take a closer look at what attracted us to TSSI initially, as well as how it performed in 2024 and what factors drove its movement.

Initial Recommendation

When The Bowser Report originally recommended TSS, Inc., we highlighted its recurring revenue model as a strong foundation for growth. The company was down 40% from its 52-week high, but financials were some of the best in company history with a Bowser Rating of 8.

Price Trend

TSS, Inc. closed 2023 trading at $0.27 per share. The stock showed a steady upward trajectory in the first quarter, reaching a high of $0.67 in March with a low of just $0.24 in mid-February.

Momentum continued in the second quarter as volume picked up. Mid-May marked a turning point as shares surged over the $1.00 milestone, closing at $1.40 on May 14. Price never even tested the $1.00 mark again, closing above $2 by the end of May and $3 in mid-July.

One of The Bowser Report's founding principles was that after a stock broke $3 per share and held, it seldom looked back. Despite a month long pullback below $3 after its first daily/weekly close above the level, TSSI shares closed higher than $3 with strong volume on August 15, kicking off the next stage of its rally.

Shares consolidated around the $5 mark in late August/early September before breaking higher, retesting $5 and consolidating more before rocketing to a close of $11.32 in mid-November. Volume spiked with shares selling off. However, with volume staying elevated, shares began to climb yet again, testing the prior mid-$11s in early December and then breaking that level at the end of December. Shares closed the year at $11.86... a remarkable 4,292.6% gain!

Financial Performance

TSS, Inc. demonstrated solid financial performance over the past several years. Highlights include:

  • Revenue Growth: The company's top line took a hit in 2021 but has recovered steadily since. Climbing 12% in 2022, 78% in 2023 and 227% in the first nine months of 2024. Most of this growth took place in the quarter ending September 30, 2024 with sales increasing 689% to $70 million for the quarter. The surge in demand for server rack builds as a result of the AI boom, and TSSI's investment in capacity in Q2 led to this drastic jump.
  • Earnings Improvement: As a result of the revenue expansion and investments in operational efficiencies, TSS, Inc. earnings are up 372% for the nine months ending September 30, 2024.
  • Debt Reduction: The company has successfully reduced its non-current debt by 19% since September 2023, strengthening its balance sheet and improving investor confidence.

Recent News

Given share price's meteoric rise, TSS, Inc. is generating more popularity. Shares uplisted to the Nasdaq Capital Market in November, increasing visibility and access to potential investors.

The company also continued adding capacity, signing a long-term building lease for a larger factory in Texas following a long-term agreement with its primary customer in the third quarter of 2024. The new space more than doubles TSSI's square footage and should be operational by the end of March 2025.

Looking Ahead

As TSS, Inc. moves into 2025, the company appears well-positioned to build on its successes from the past year. The Nasdaq recognized the company's growth by inviting management to ring the closing bell on January 24, 2025. And, with the signing of a long-term agreement with its largest customer, TSSI is poised to continue delivering results for investors.

Congratulations to all Bowser subscribers who remained patient with TSSI. While this one is well out of buying range, which we consider under $5 per share, we will continue to highlight strong companies trading under that mark. As always, we recommend thorough due diligence and careful consideration of the risks and rewards associated with investing in small-cap stocks.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a licensed financial advisor before making investment decisions.