GDS Holdings Limited ADS (GDS)

FairStock Score: 28/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look at GDS as a capital-intensive landlord of Chinese data centers. The business has scale and demand, but landlords rarely earn high returns without discipline. The latest reported quarter, 2026-Q2, showed revenue of $3.1B, net income of $835.2M, and a 27.05% margin. That is real profit at meaningful scale. Mr. Market has priced it at $29.60 as of the close on 2026-10-13, and FairStock's calculations give a P/E of 13.04 and P/B of 1.32. A Graham Number of $32.10 gives only a 7.79% margin of safety, so I would not call it deeply cheap. The balance sheet gives me pause: D/E is 1.43, ROCE is only 1.57%, and trailing free cash flow is negative $854.8M, a -9.8% FCF yield. An Altman Z-Score of 0.27 signals financial distress risk. ROE of 12.77% is decent but likely flattered by leverage. Piotroski is 5/9, fair but not strong. The EV/EBITDA of 7.29 and PEG of 0.05 suggest expectations are not demanding if growth persists, but negative cash flow and leverage are the crux. FairStock's Lynch category is none because only 0 years of filed results exist, needing 3. I prefer businesses that generate cash and carry less debt. GDS has growth and a low beta of 0.43, but the quality of earnings and balance sheet need proof. At this price, it is a speculative value situation, not a clear margin-of-safety bargain.

In plain English: GDS builds and runs data centers in China. The latest reported quarter showed a profit and the company has been growing, but it is spending more cash than it brings in and carries a lot of debt. At the recent price, the stock looks roughly fair rather than an obvious bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer