GDS (NASDAQ:GDS) Shares Down 6.1% – Time to Sell?

GDS Holdings (NASDAQ:GDS)’s share price dropped 6.1% on Wednesday . The stock traded as low as $37.76 and last traded at $37.9320. Approximately 832,154 shares traded hands during mid-day trading, a decline of 60% from the average daily volume of 2,063,703 shares. The stock had previously closed at $40.41.

Key Headlines Impacting GDS

Here are the key news stories impacting GDS this week:

• Positive Sentiment: GDS reported Q1 EPS of $1.53, far above the $1.06 consensus and well ahead of the prior-year $0.48 result, signaling better-than-expected profitability. Article
• Positive Sentiment: The company said it saw record data center bookings, which suggests continued demand for its China-based data center capacity and supports future revenue growth. Article
• Positive Sentiment: First-quarter revenue rose 23.6% year over year to RMB3.37 billion, showing that the business is still expanding at a solid pace. Article
• Neutral Sentiment: GDS also announced a board change, with an independent director and audit committee chair resigning for personal reasons and a replacement appointed. This is notable for governance, but it does not appear to be the main driver of the stock move. Article
• Negative Sentiment: Revenue came in slightly below expectations, and one research firm downgraded the stock from strong-buy to hold, which may temper some of the enthusiasm around the earnings beat. Article

Analyst Ratings Changes

A number of analysts have recently weighed in on GDS shares. Weiss Ratings upgraded GDS from a “hold (c-)” rating to a “hold (c)” rating in a research report on Monday. Wall Street Zen upgraded GDS from a “sell” rating to a “hold” rating in a research report on Saturday, May 2nd. Zacks Research downgraded GDS from a “strong-buy” rating to a “hold” rating in a research report on Monday. Finally, Morgan Stanley reiterated an “overweight” rating and set a $64.00 target price on shares of GDS in a research report on Tuesday, March 17th. One investment analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat, GDS has an average rating of “Moderate Buy” and an average price target of $49.90.

GDS Price Performance

The company has a current ratio of 2.60, a quick ratio of 2.60 and a debt-to-equity ratio of 1.60. The firm has a market cap of $7.36 billion, a price-to-earnings ratio of 72.73 and a beta of 0.46. The company’s 50-day moving average is $42.70 and its 200-day moving average is $39.94.

GDS (NASDAQ:GDS) last posted its quarterly earnings results on Friday, May 15th. The company reported $1.53 earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.03) by $1.56. The business had revenue of $426.13 million for the quarter, compared to analyst estimates of $436.44 million. GDS had a net margin of 8.12% and a return on equity of 8.79%. The firm’s revenue for the quarter was up 23.7% on a year-over-year basis. During the same quarter last year, the business posted $3.47 EPS. Equities research analysts predict that GDS Holdings will post 1.16 earnings per share for the current year.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Parallel Advisors LLC grew its position in GDS by 3.5% in the fourth quarter. Parallel Advisors LLC now owns 6,901 shares of the company’s stock valued at $241,000 after acquiring an additional 236 shares during the last quarter. PNC Financial Services Group Inc. grew its position in GDS by 8.4% in the first quarter. PNC Financial Services Group Inc. now owns 3,904 shares of the company’s stock valued at $157,000 after acquiring an additional 303 shares during the last quarter. Wealth Enhancement Advisory Services LLC grew its position in GDS by 3.9% in the third quarter. Wealth Enhancement Advisory Services LLC now owns 10,388 shares of the company’s stock valued at $390,000 after acquiring an additional 388 shares during the last quarter. Vanguard Personalized Indexing Management LLC grew its position in GDS by 3.0% in the fourth quarter. Vanguard Personalized Indexing Management LLC now owns 15,955 shares of the company’s stock valued at $557,000 after acquiring an additional 468 shares during the last quarter. Finally, EverSource Wealth Advisors LLC grew its position in GDS by 41.6% in the second quarter. EverSource Wealth Advisors LLC now owns 1,806 shares of the company’s stock valued at $55,000 after acquiring an additional 531 shares during the last quarter. Institutional investors own 33.71% of the company’s stock.

About GDS

GDS Holdings Limited, founded in 2001 and headquartered in Shanghai, is a leading network-neutral data center services provider in China. The company operates a portfolio of state-of-the-art data center facilities designed to support the mission-critical IT infrastructure of cloud service providers, internet enterprises, financial institutions, and government entities. GDS was among the first Chinese providers to offer high-density colocation solutions, catering to customers with demanding computing and storage requirements.

GDS specializes in delivering scalable colocation, cross-connect, and interconnection services within its facilities, enabling clients to establish high-speed, low-latency connections to major cloud platforms and internet exchange points.