Tecsys (TSX:TCS) - Share price, News & Analysis

Q: What is the Fair Price of TCS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TCS (CA$37.42) is trading above our estimate of [[fair value]] (CA$27.31)

TCS fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	1/6
Financial Health	5/6
Dividends	0/6

TCS Stock Overview

Tecsys Inc. engages in the development, marketing, and sale of supply chain management software in Canada, the United States, Europe, and internationally.

Rewards

Earnings are forecast to grow 63.39% per year

Risk Analysis

Profit margins (2.9%) are lower than last year (4.7%)

Tecsys Competitors

Sylogist

TSX:SYZ

CA$174.6m

Coveo Solutions

TSX:CVO

CA$550.3m

Magnet Forensics

TSX:MAGT

CA$762.0m

Route1

TSXV:ROI

CA$5.4m

Price History & Performance

Summary of all time highs, changes and price drops for Tecsys
Historical stock prices
Current Share Price	CA$37.42
52 Week High	CA$61.06
52 Week Low	CA$24.92
Beta	0.56
1 Month Change	26.38%
3 Month Change	16.94%
1 Year Change	-8.64%
3 Year Change	171.16%
5 Year Change	156.30%
Change since IPO	458.51%

Recent News & Updates

May 31

Does Tecsys (TSE:TCS) Have A Healthy Balance Sheet?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Mar 15

Tecsys (TSE:TCS) Has Affirmed Its Dividend Of CA$0.07

Tecsys Inc. ( TSE:TCS ) will pay a dividend of CA$0.07 on the 14th of April. Based on this payment, the dividend yield...

Shareholder Returns

	TCS	CA Software	CA Market
7D	16.4%	5.7%	0.1%
1Y	-8.6%	-26.5%	-2.6%

Return vs Industry: TCS exceeded the Canadian Software industry which returned -24.6% over the past year.

Return vs Market: TCS underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is TCS's price volatile compared to industry and market?
TCS volatility
TCS Average Weekly Movement	7.5%
Software Industry Average Movement	12.8%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: TCS is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: TCS's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1983	655	Peter Brereton	https://www.tecsys.com

Tecsys Inc. engages in the development, marketing, and sale of supply chain management software in Canada, the United States, Europe, and internationally. The company offers warehouse management, distribution and transportation management, supply management at point-of-use, and retail order management, as well as financial management and analytics solutions. It also provides demand planning; and implementation, system enhancement, cloud, advisory, consulting, education, and support services, as well as OneSprint, a preconfigured cloud-based warehouse management systems package.

Tecsys Fundamentals Summary

How do Tecsys's earnings and revenue compare to its market cap?
TCS fundamental statistics
Market Cap	CA$544.94m
Earnings (TTM)	CA$3.91m
Revenue (TTM)	CA$135.13m

139.3x

P/E Ratio

4.0x

P/S Ratio

Is TCS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TCS income statement (TTM)
Revenue	CA$135.13m
Cost of Revenue	CA$74.38m
Gross Profit	CA$60.75m
Other Expenses	CA$56.84m
Earnings	CA$3.91m

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

Jun 29, 2022

Earnings per share (EPS)	0.27
Gross Margin	44.96%
Net Profit Margin	2.89%
Debt/Equity Ratio	12.9%

How did TCS perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

100%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is TCS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TCS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TCS. This is calculated by dividing TCS's market cap by their current preferred multiple.
What is TCS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$544.94m

TCS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.9x
Enterprise Value/EBITDA	65.7x
PEG Ratio	2.2x

Price to Earnings Ratio vs Peers

How does TCS's PE Ratio compare to its peers?

TCS PE Ratio vs Peers

The above table shows the PE ratio for TCS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	79.3x
SYZ Sylogist	91.9x	-32.4%	CA$174.6m
CVO Coveo Solutions	1x	-130.6%	CA$550.3m
MAGT Magnet Forensics	161.3x	78.9%	CA$762.0m
ROI Route1	63.1x	n/a	CA$5.4m
TCS Tecsys	139.3x	63.4%	CA$544.9m

Forward PE

Price-To-Earnings vs Peers: TCS is expensive based on its Price-To-Earnings Ratio (139.3x) compared to the peer average (79.3x).

Price to Earnings Ratio vs Industry

How does TCS's PE Ratio compare vs other companies in the CA Software Industry?

Price-To-Earnings vs Industry: TCS is expensive based on its Price-To-Earnings Ratio (139.3x) compared to the Canadian Software industry average (52.7x)

Price to Earnings Ratio vs Fair Ratio

What is TCS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TCS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	139.3x
Fair PE Ratio	41.5x

Price-To-Earnings vs Fair Ratio: TCS is expensive based on its Price-To-Earnings Ratio (139.3x) compared to the estimated Fair Price-To-Earnings Ratio (41.5x).

Share Price vs Fair Value

What is the Fair Price of TCS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TCS (CA$37.42) is trading above our estimate of fair value (CA$27.31)

Significantly Below Fair Value: TCS is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: TCS is poor value based on its PEG Ratio (2.2x)

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Future Growth

How is Tecsys forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

63.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TCS's forecast earnings growth (63.4% per year) is above the savings rate (1.6%).

Earnings vs Market: TCS's earnings (63.4% per year) are forecast to grow faster than the Canadian market (8.2% per year).

High Growth Earnings: TCS's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TCS's revenue (12.1% per year) is forecast to grow faster than the Canadian market (6.9% per year).

High Growth Revenue: TCS's revenue (12.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if TCS's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Tecsys performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-3.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TCS has high quality earnings.

Growing Profit Margin: TCS's current net profit margins (2.9%) are lower than last year (4.7%).

Past Earnings Growth Analysis

Earnings Trend: TCS's earnings have declined by 3.1% per year over the past 5 years.

Accelerating Growth: TCS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TCS had negative earnings growth (-29.4%) over the past year, making it difficult to compare to the Software industry average (7.6%).

Return on Equity

High ROE: TCS's Return on Equity (5.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Tecsys's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: TCS's short term assets (CA$76.7M) exceed its short term liabilities (CA$44.7M).

Long Term Liabilities: TCS's short term assets (CA$76.7M) exceed its long term liabilities (CA$16.6M).

Debt to Equity History and Analysis

Debt Level: TCS has more cash than its total debt.

Reducing Debt: TCS's debt to equity ratio has increased from 8.3% to 12.9% over the past 5 years.

Debt Coverage: TCS's debt is well covered by operating cash flow (53%).

Interest Coverage: TCS's interest payments on its debt are well covered by EBIT (40.1x coverage).

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.75%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: TCS's dividend (0.75%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: TCS's dividend (0.75%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).

Stability and Growth of Payments

Stable Dividend: TCS is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: TCS is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: TCS is not paying a notable dividend for the Canadian market.

Cash Payout to Shareholders

Cash Flow Coverage: TCS is not paying a notable dividend for the Canadian market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.7yrs

Average management tenure

CEO

Peter Brereton

27.42yrs

Tenure

CA$1,467,177

Compensation

Mr. Peter Brereton has been the Chief Executive Officer of Tecsys Inc., since 1998 and its President since 1995. Mr. Brereton served as Co-Chief Executive Officer of Tecsys Inc., until November 2006. Mr. B...

CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD1.14M) is about average for companies of similar size in the Canadian market ($USD1.24M).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: TCS's management team is considered experienced (4.7 years average tenure).

Board Members

Experienced Board: TCS's board of directors are seasoned and experienced ( 13.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/01/31
Annual Earnings	2021/04/30