TSX:PATH

Stock Analysis Report

Executive Summary

CounterPath Corporation designs, develops, and sells software and services that enable enterprises and telecommunication service providers to deliver unified communications services over Internet protocol based networks in North America and internationally.

Risk Analysis

Earnings have declined by -4.2% per year over past 5 years

Has less than 1 year of cash runway

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

+ 1 more risk


Snowflake Analysis

Weak fundamentals or lack of information.

Share Price & News

How has CounterPath's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PATH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-18.0%

PATH

2.6%

CA Software

-0.3%

CA Market


1 Year Return

52.5%

PATH

32.2%

CA Software

9.2%

CA Market

Return vs Industry: PATH exceeded the Canadian Software industry which returned 32.5% over the past year.

Return vs Market: PATH exceeded the Canadian Market which returned 9.8% over the past year.


Shareholder returns

PATHIndustryMarket
7 Day-18.0%2.6%-0.3%
30 Day135.3%9.3%1.7%
90 Dayn/a15.0%6.0%
1 Year52.5%52.5%34.6%32.2%12.7%9.2%
3 Year-17.3%-17.3%89.8%85.2%17.0%6.4%
5 Year-69.7%-69.7%151.0%143.4%37.1%17.0%

Price Volatility Vs. Market

How volatile is CounterPath's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CounterPath undervalued compared to its fair value and its price relative to the market?

6.43x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate PATH's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate PATH's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: PATH is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: PATH is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PATH's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PATH is overvalued based on its PB Ratio (9.6x) compared to the CA Software industry average (2.8x).


Next Steps

Future Growth

How is CounterPath forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

19.2%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as CounterPath has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has CounterPath performed over the past 5 years?

-4.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PATH is currently unprofitable.

Growing Profit Margin: PATH is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: PATH is unprofitable, and losses have increased over the past 5 years at a rate of -4.2% per year.

Accelerating Growth: Unable to compare PATH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: PATH is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (23.2%).


Return on Equity

High ROE: PATH has a negative Return on Equity (-190.86%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CounterPath's financial position?


Financial Position Analysis

Short Term Liabilities: PATH's short term assets ($3.7M) do not cover its short term liabilities ($5.1M).

Long Term Liabilities: PATH's short term assets ($3.7M) do not cover its long term liabilities ($5.3M).


Debt to Equity History and Analysis

Debt Level: PATH's debt to equity ratio (208%) is considered high.

Reducing Debt: Insufficient data to determine if PATH's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: PATH has a low level of unsold assets or inventory.

Debt Coverage by Assets: PATH's debt is not covered by short term assets (assets are 0.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: PATH has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: PATH has less than a year of cash runway if free cash flow continues to reduce at historical rates of -38.5% each year


Next Steps

Dividend

What is CounterPath's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.5%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate PATH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PATH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PATH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PATH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PATH's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of CounterPath's salary, the management and board of directors tenure and is there insider trading?

0.3yrs

Average management tenure


CEO

David Karp (54yo)

1.3yrs

Tenure

US$376,690

Compensation

Mr. David L. Karp, CFA, MBA, P.Eng. has been President and Chief Executive Officer at CounterPath Corporation since September 19, 2019. Mr. Karp served as an Interim Chief Executive Officer of CounterPath  ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD376.69K) is above average for companies of similar size in the Canadian market ($USD165.67K).

Compensation vs Earnings: David's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

0.3yrs

Average Tenure

49yo

Average Age

Experienced Management: PATH's management team is not considered experienced ( 0.3 years average tenure), which suggests a new team.


Board Age and Tenure

14.4yrs

Average Tenure

62yo

Average Age

Experienced Board: PATH's board of directors are seasoned and experienced ( 14.4 years average tenure).


Insider Trading

Insider Buying: PATH insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$77,92914 Jan 20
Larry Timlick
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares11,000
Max PriceCA$7.18

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2%.


Management Team

  • David Karp (54yo)

    President & CEO

    • Tenure: 1.3yrs
    • Compensation: US$376.69k
  • Michael Doyle

    Vice President of Technology

    • Todd Carothers (49yo)

      Chief Revenue Officer

      • Tenure: 0.3yrs
      • Compensation: US$655.43k
    • John Wigboldus

      Senior Vice President of Sales

      • Nemer Abourizk

        General Counsel

        • Steve Kinsey

          Senior Consultant & Member of Advisory Board

          • Steve Hards

            Vice President of Investor Relations

            • Karen Luk (37yo)

              Vice President of Finance

              • Tenure: 0.3yrs
            • Hanna Miller

              Vice President of Marketing

              • Tenure: 0.3yrs

            Board Members

            • Terry Matthews (76yo)

              Independent Chairman of the Board

              • Compensation: US$43.88k
            • Owen Matthews (47yo)

              Independent Vice Chairman of the Board

              • Compensation: US$36.24k
            • Alan Duric

              Member of Advisory Board

              • Chris Cooper (49yo)

                Independent Director

                • Tenure: 14.4yrs
                • Compensation: US$38.15k
              • Larry Timlick (62yo)

                Independent Director

                • Tenure: 14.6yrs
                • Compensation: US$38.15k
              • Rohan Mahy

                Member of Advisory Board

                • Robert Sparks

                  Member of Advisory Board

                  • Stephen Cho

                    Member of Advisory Board

                    • Bruce Joyce (71yo)

                      Independent Director

                      • Tenure: 6.3yrs
                      • Compensation: US$38.15k
                    • Steve Kinsey

                      Senior Consultant & Member of Advisory Board

                      Company Information

                      CounterPath Corporation's company bio, employee growth, exchange listings and data sources


                      Key Information

                      • Name: CounterPath Corporation
                      • Ticker: PATH
                      • Exchange: TSX
                      • Founded: 2002
                      • Industry: Application Software
                      • Sector: Software
                      • Market Cap: CA$17.258m
                      • Shares outstanding: 6.10m
                      • Website: https://www.counterpath.com

                      Number of Employees


                      Location

                      • CounterPath Corporation
                      • One Bentall Centre
                      • Suite 300
                      • Vancouver
                      • British Columbia
                      • V7X 1M3
                      • Canada

                      Listings

                      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                      CPAHNasdaqCM (Nasdaq Capital Market)YesCommon SharesUSUSDFeb 2006
                      PATHTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 2006

                      Biography

                      CounterPath Corporation designs, develops, and sells software and services that enable enterprises and telecommunication service providers to deliver unified communications services over Internet protocol based networks in North America and internationally. Its products include Bria softphone suite, which enables consumers and business users to make voice over Internet protocol (VoIP) audio and video calls, send instant messages, manage their presence, share their screen, and collaborate with other users using desktop computers and laptops, smartphones, and tablets; and X-Lite, a standards-based VoIP softphone application that runs on desktop computers. The company also offers software development kits that deliver voice, video, and messaging capabilities for desktop, tablet, and mobile devices; Stretto Platform, a carrier-grade software platform for enterprises and service providers; Bria Teams, which delivers centralized provisioning, messaging, and screen sharing from the cloud; and Brio Stretto for enterprises, operators, and telecommunication channel partners to leverage the Stretto Platform to procure, distribute, provide, and manage Bria Stretto clients from the cloud, as well as to offer hosted messaging and collaboration solutions. In addition, it provides subscription, support, and maintenance services; and professional and other services, such as product configuration and customization, implementation, engineering, and training. The company sells its products and services through its own and third-party online stores; and directly using its in-house sales team, as well as through its channel partners. It serves small, medium, and large sized businesses; telecommunications service providers and Internet telephony service providers; original equipment manufacturers, value added distributors, and value added resellers serving the telecommunication market; and end users. CounterPath Corporation was founded in 2002 and is headquartered in Vancouver, Canada. 


                      Company Analysis and Financial Data Status

                      All financial data provided by Standard & Poor's Capital IQ.
                      DataLast Updated (UTC time)
                      Company Analysis2020/01/25 00:46
                      End of Day Share Price2020/01/24 00:00
                      Earnings2019/10/31
                      Annual Earnings2019/04/30


                      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.