NasdaqCM:TCX

Stock Analysis Report

Executive Summary

Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Germany.


Snowflake Analysis

Questionable track record with imperfect balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.9%

TCX

2.6%

US IT

1.2%

US Market


1 Year Return

-4.9%

TCX

41.9%

US IT

24.2%

US Market

Return vs Industry: TCX underperformed the US IT industry which returned 39.9% over the past year.

Return vs Market: TCX underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

TCXIndustryMarket
7 Day0.9%2.6%1.2%
30 Day8.1%6.3%3.5%
90 Day14.7%17.4%11.7%
1 Year-4.9%-4.9%43.3%41.9%26.9%24.2%
3 Year35.4%35.4%109.6%100.7%53.0%43.2%
5 Year253.2%253.2%156.2%133.4%75.3%56.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

49.09x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TCX ($64.31) is trading above our estimate of fair value ($11.06)

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


Price To Earnings Ratio

PE vs Industry: TCX is poor value based on its PE Ratio (48.7x) compared to the IT industry average (32x).

PE vs Market: TCX is poor value based on its PE Ratio (48.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: TCX is overvalued based on its PB Ratio (7.8x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is Tucows forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if TCX's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if TCX's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TCX's revenue (6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: TCX's revenue (6% 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 TCX's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Tucows performed over the past 5 years?

16.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TCX has high quality earnings.

Growing Profit Margin: TCX's current net profit margins (4.2%) are lower than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: TCX's earnings have grown by 16.7% per year over the past 5 years.

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

Earnings vs Industry: TCX had negative earnings growth (-41.2%) over the past year, making it difficult to compare to the IT industry average (16.2%).


Return on Equity

High ROE: TCX's Return on Equity (16.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tucows's financial position?


Financial Position Analysis

Short Term Liabilities: TCX's short term assets ($147.1M) do not cover its short term liabilities ($166.1M).

Long Term Liabilities: TCX's short term assets ($147.1M) do not cover its long term liabilities ($166.2M).


Debt to Equity History and Analysis

Debt Level: TCX's debt to equity ratio (120.7%) is considered high.

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

Debt Coverage: TCX's debt is well covered by operating cash flow (36.1%).

Interest Coverage: TCX's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: TCX has a high level of physical assets or inventory.

Debt Coverage by Assets: TCX's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate TCX'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 TCX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TCX'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 TCX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Elliot Noss (56yo)

20.7yrs

Tenure

US$575,987

Compensation

Mr. Elliot Noss has been the Chief Executive Officer and President of Tucows Inc. since May 1999. Mr. Noss has been a leader in the Internet industry for ten years. From May 1999 to August 2001, he served  ...


CEO Compensation Analysis

Compensation vs Market: Elliot's total compensation ($USD575.99K) is below average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: Elliot's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

2.8yrs

Average Tenure

47yo

Average Age

Experienced Management: TCX's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

10.7yrs

Average Tenure

60yo

Average Age

Experienced Board: TCX's board of directors are seasoned and experienced ( 10.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$233,90006 Oct 19
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Shares4,428
Max PriceUS$52.82
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Max PriceUS$50.45
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Max PriceUS$62.02
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Shares20,000
Max PriceUS$58.97
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David Woroch
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Domains
Shares6,000
Max PriceUS$60.68
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EntityCompany
Shares7,000
Max PriceUS$58.88
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Max PriceUS$58.60
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Max PriceUS$64.91
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Max PriceUS$65.67
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Shares28,000
Max PriceUS$68.86
SellUS$859,70918 Apr 19
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Shares10,000
Max PriceUS$85.97
BuyUS$532,62807 Apr 19
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EntityCompany
Shares6,500
Max PriceUS$81.94
SellUS$318,00001 Apr 19
Jeffrey Schwartz
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,000
Max PriceUS$79.50
SellUS$241,50026 Mar 19
Jeffrey Schwartz
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
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SellUS$393,89326 Mar 19
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EntityCompany
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David Woroch
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Domains
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Rawleigh Ralls
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
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SellUS$1,478,62013 Feb 19
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EntityCompany
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Ownership Breakdown

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


Management Team

  • Elliot Noss (56yo)

    President

    • Tenure: 20.7yrs
    • Compensation: US$575.99k
  • David Woroch (56yo)

    Executive Vice President of Domains

    • Tenure: 6yrs
    • Compensation: US$374.43k
  • Ross Rader (47yo)

    Chief Customer Officer

    • Thorsten Einig

      Managing Director of Europe

      • Tenure: 9.3yrs
    • Dave Singh (44yo)

      CFO, Executive VP

      • Tenure: 2.8yrs
      • Compensation: US$324.09k
    • Michael Goldstein (47yo)

      Chief Revenue Officer of Ting

      • Tenure: 0.5yrs
      • Compensation: US$419.22k
    • Jess Johannson (46yo)

      Chief People Officer

      • Tenure: 3yrs
    • Bret Fausett (55yo)

      Chief Legal Officer & General Counsel

      • Tenure: 2.3yrs
      • Compensation: US$328.14k
    • Hanno Liem (45yo)

      Chief Technology Officer

      • Tenure: 2yrs
    • Justin Reilly

      Chief Product Officer

      • Tenure: 0.3yrs

    Board Members

    • Brad Burnham (64yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: US$90.30k
    • Jeffrey Schwartz (56yo)

      Independent Director

      • Tenure: 14.6yrs
      • Compensation: US$121.80k
    • Allen Karp (79yo)

      Chairman & Lead Director of the Board

      • Tenure: 7.7yrs
      • Compensation: US$136.80k
    • Erez Gissin (60yo)

      Independent Director

      • Tenure: 18.4yrs
      • Compensation: US$102.30k
    • Elliot Noss (56yo)

      President

      • Tenure: 20.7yrs
      • Compensation: US$575.99k
    • Robin Chase (60yo)

      Independent Director

      • Tenure: 5.3yrs
      • Compensation: US$102.30k
    • Rawleigh Ralls (57yo)

      Independent Director

      • Tenure: 10.7yrs
      • Compensation: US$113.55k

    Company Information

    Tucows Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Tucows Inc.
    • Ticker: TCX
    • Exchange: NasdaqCM
    • Founded: 1992
    • Industry: Internet Services and Infrastructure
    • Sector: Software
    • Market Cap: US$685.927m
    • Shares outstanding: 10.57m
    • Website: https://www.tucows.com

    Number of Employees


    Location

    • Tucows Inc.
    • 96 Mowat Avenue
    • Toronto
    • Ontario
    • M6K 3M1
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    TCXNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDAug 2001
    TUQ1DB (Deutsche Boerse AG)YesCommon StockDEEURAug 2001
    TCTSX (The Toronto Stock Exchange)YesCommon StockCACADAug 2001
    0LH4LSE (London Stock Exchange)YesCommon StockGBUSDAug 2001

    Biography

    Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Germany. It operates in two segments, Network Access Services and Domain Services. The Network Access Services segment engages in the provision of mobile services under the Ting Mobile name, including the sale of retail telephony services, mobile phone hardware, and related accessories. It also provides roaming service to international travelers under the Zipsim and Always Online Wireless names; fixed high-speed Internet access services to consumer and business customers; Internet hosting and network consulting services; and billing, provisioning, and customer care software solutions to Internet Service Providers (ISPs) through its Platypus billing software. This segment distributes its products and services through the Ting Website, as well as through third-party retail stores and online retailers. The Domain Services segment offers wholesale and retail domain name registration services, value added services, and portfolio services under the OpenSRS, eNom, and Hover names. Its value-added services include hosted email, which provides email delivery and Webmail access to various mailboxes; Internet security services; and Internet hosting, WHOIS privacy, publishing tools, and other value-added services for end-users. In addition, this segment sells retail domain name registration and email services to individuals and small businesses; and leases and sells a portfolio of domain names. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 23:48
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.