TSS, Inc. Upgraded to Buy as Margin Expansion and Revenue Mix Shift Materialize

Seeking Alpha upgraded TSS, Inc. to a Buy rating. The firm cited materializing margin expansion and a favorable revenue mix shift.

Systems integration and facilities management segments now constitute a larger portion of revenue. This boosted the consolidated gross margin by 640 basis points. The gross margin reached 22.8%. EBITDA increased by 12%.

The company expects its investment in Vera Rubin capacity to contribute meaningfully to revenue. Contributions will begin in the fourth quarter. Multi-year agreements for AI rack integration provide better revenue visibility.

Seeking Alpha estimates TSSI's fair value at $11 per share. This is 30% above its current price.