GDS Holdings Limited (GDS): fair value, margin of safety and Wheel Score

Is GDS undervalued?

At 25.32 (close of 16 Oct 2026), GDS trades 25% under the GLS average fair value of 33.66. 4 of the 6 models that produced a value land above the price. A discount of this size counts as a positive margin of safety in every GLS screen; whether it is enough depends on the rest of the picture - the health score, the moat and the option premium below.

The 6 models disagree widely: Lynch gives 11.54 while 10 Cap gives 62.06. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files GDS under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for GDS

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is average - GDS passes 5 of the nine Piotroski tests, which falls one point short of the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 2.2 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.

Returns on capital are thin or negative - ROIC 1.3%, ROE 3.5%, ROA 1.2% - with debt at 1.77 times equity and negative free cash flow.

GDS Holdings Limited pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Service revenue 50%, Colocation services 45%, Managed service and others 5% (fiscal year FY2025).

Institutional ownership scores 7/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 73: Good

GDS scores 73 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 23/25), Piotroski health (11/20), the GLS moat (3/15), the option premium on offer (17/20) and how easily the stock trades (19/20). Moat (3/15) is the part holding the score back.

Implied volatility is 72% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (17 of 20) because volatility this high usually comes with a reason. The option chain is deep: 120,695 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 4.5M shares a day on a market cap of $4.9B, with a beta of 0.42 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 19 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 18 Nov 2026 (before the open), 33 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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