Why GDS Holdings Stock Plummeted by Almost 14% Today

It was a Hump Day to forget for GDS Holdings (NASDAQ: GDS), as the Chinese company's latest earnings release was greeted with a significant sell-off. GDS's American depositary shares (ADS) suffered a nearly 14% decline in price as a result, which was in marked contrast to the S&P 500's (SNPINDEX: ^GSPC) gain of over 1% on the day.

GDS' final 2024 earnings release was published

That morning, GDS unveiled its fourth-quarter and full-year 2024 figures.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

For the former period, revenue rose by 9% year over year to 2.69 billion yuan ($372 million). On the bottom line, the company's net loss from continuing operations was slightly over 173 million yuan ($24 million), a considerably narrower deficit than the 3.07 billion ($425 million) in the same period of 2023.

Commenting on the company's performance across the year, CEO William Huang was quoted in the earnings release as saying: "In 2024, we executed our business strategy in a disciplined way. We focused on backlog delivery while being selective on new commitments."

GDS also provided guidance for the entirety of 2025. For the year, it's anticipating that total revenue will come in at 11.29 billion yuan ($1.56 billion) to 11.59 billion yuan ($1.6 billion), which would represent growth of at least 9% over the 2024 result.

Non-GAAP (generally accepted accounting principles) adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be 5.19 billion yuan ($718 million) to 5.39 billion yuan ($745 million); the low end of that range is 6% above the 2024 figure.

Undeserved punishment

Neither the quarter nor the year was disastrous for GDS, so the aggressive sell-off Wednesday feels unjustified. I can see being disappointed by some of these results -- anticipated single-digit growth for 2025, given the company's previous leaps in key metrics -- but not disappointed enough to get rid of GDS stock. This sell-off could provide a good opportunity to snap up shares of the company.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $299,339!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,324!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $501,530!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 18, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.